Dividends may seem like a free money, but if you're not prepared for it you'll be caught with an unexpected tax-burden at the end of the year. My own investing strategy relies on both reducing dividend in taxable accounts and embracing them tax-advantaged ones. This allocation helps to cut taxes to the bone.

When I first started investing, one of the most interesting things to me was the idea of dividends. Free money added back to my account, regardless of the price of the fund? That sounds amazing! If the fund doesn’t go up, at least I’ll still have money in my pocket. As I’ve grown to learn more about dividend funds (and more importantly taxes), my position on dividends has shifted and now I avoid them as much as possible.

So what are dividends? In short, they’re profit by the company (or companies) behind a stock or fund that are returned to the shareholder. This is usually stated as the “yield” when looking at a fund.

The 2.56% yield here means that over the last year this fund returned a 2.56% dividend back to shareholders. If you had invested $100,000 in this fund, you would have earned $2,560 in dividends. These dividends would most likely be added back to your account. At that point, you’d have control over what happens to them:

Reinvest them back into this fund by buying more of it (most common).

Invest them in a different fund.

Take the cash and use it however you want.

This “profit” doesn’t need to be a company profit from sales either. This could be a bond that has matured and made money, a real estate investment trust (REIT) that made money through selling a property or (most commonly) a diversified index fund that is returning dividends from the companies within the fund.

If you’re like me when you first hear about dividends you might be thinking:

This seems like free money! Why would this be bad?!

And you wouldn’t be all wrong either. If you’re analyzing 2 funds that are otherwise identical and one of them has a dividend and the other doesn’t – the dividend fund is clearly the better choice. I haven’t had that ever be a tie-breaker, but it is one to consider.

Taxes for Dividends

Dividends aren’t “free money”. Dividends will be taxed when you receive them – if they’re in a taxable account. If your funds are in a tax-deferred account (IRA, 401k) or a tax-free account (Roth IRA, HSA) then congrats! You did just get free money! With the IRA/401k, you’ll still need to pay taxes when you withdraw, but that’s expected.

What’s less expected is how dividends are taxed in taxable/brokerage accounts. Let’s look at that $100,000 invested in $VBMFX again with the $2,560 in dividends. With dividends in a taxable account, things get more complicated. The dividends themselves are taxed at two different tax rates depending on the type of dividend you receive.

Qualified Dividends vs Unqualified Dividends

First, we need to know what amount of the $2,560 come from qualified dividends vs unqualified dividends. Every “dividend” created will be some combination of these two. The reason this distinction is important is that they are taxed differently:

Qualified dividends are taxed at the long-term capital gains rate. (most likely 15% if your income is above $38,600/$77,200)

Unqualified dividends are taxed at the short-term capital gains rate (which is your ordinary income rate).

As for why a dividend would be classified one way or the other, it gets a little confusing. In order to be a qualified dividend, it needs to come from a public traded company and you need to hold that share for at least 60 days prior to the dividend. The dividend also can’t come from an immediate sale or be unscheduled – as happens with REIT dividends. In other words, the best way to get qualified dividends is to buy and hold a stock fund.

Tax Brackets for Dividends

You will always pay fewer taxes on qualified dividends than unqualified dividends. Depending on your tax rate, the amount you’ll pay in taxes will be very different. For qualified dividends, if you’re making more than $38,600 (single filer) or $77,200 (joint filing), then you’ll pay $0 in taxes on qualified dividends due to your capital gain rate! Here are the full table on the rates for these for 2018:

2018 Income Tax Brackets

Tax Rate

Individuals

Married, Filing Jointly

Long-Term Capital Gains Rate

10%

Up to $9,525

Up to $19,050

0%

12%

$9,520 to $38,700

$19,050 to $77,400

0%

22%

$38,701 to $82,500

$77,401 to $165,000

15%

24%

$82,501 to $157,500

$165,001 to $315,000

15%

32%

$157,501 to $200,000

$315,001 to $400,000

15%

35%

$200,000 to $425,800

$400,001 to $479,000

15%

35%

$425,800 to $500,000

$479,001 to $600,000

20%

37%

Over $500,000

Over $600,000

20%

Whatever range your income (after your personal deduction or itemized deductions) falls in is the rate you’ll pay for any dividends you receive. Between these two, you want any dividends to be taxed at the long-term capital gains rate, but it’s even better if they’re not taxed at all!

The annoying part is that for our $2,560 in dividends from the bond fund we talked about would mean we would pay taxes of $384 each year (if in the 15% long-term capital gains bracket). Over 30 years, that’ll be around $12,000 not invested back into the stock market. If you run this through a compound interest calculator (which of course I did) then that $384 a year becomes $38,812 over 30 years! That’s potentially a pretty big chunk of one-year spending right there.

If your income is below the 15% rate, congratulations! You don’t need to worry much about dividends now. I would still be cautious about them. If your income were to rise later, all of the sudden you would start to become accountable for paying taxes on them. If you’re still young and making less than this now, but think your income will grow, take the time now to set yourself up tax-advantaged funds today. It’s much harder to change this later, especially in brokerage/taxable accounts.

How Do You Avoid Dividends?

If dividends are taxed when they’re received, there are three ways to avoid paying any taxes on them whatsoever:

Hold long-term and make under $38,600/$77,200

Hold them in a tax-advantaged account

Choose more tax-efficient funds

Hold long-term and make under $38,600/$77,200

One very important thing to note here: this isn’t your spending, this is your income! Here are three quick examples for how you could have $70,000 in income during a year:

You have a W2 job that pays you $70,000 a year. (~$56k spendable cash after $14k tax)

You’re 60 years old and you withdraw $70,000 from your 401k. (~$56k spendable cash after $14k tax)

You have dividends of $5,000 and sell $100,000 in stock. The stock was originally bought for $35,000 – giving you $65,000 in capital gains ($65k + $5k = $70k). ($105,000 spendable cash after $0 tax)

The key part to all this is that qualified dividends (and capital gains in general) can be greatly reduced by making under $38,600/$77,200. Also for all of these numbers, you’ll also get a personal deduction ($12,000 individual / $24,000 filing jointly) which will lower the income even more!

Hold them in a tax-advantaged account

Dividends in a tax-advantaged account are easy, there’s nothing to worry about there. Every time I get dividends it’s free money that gets immediately reinvested into the fund! Since these aren’t taxed every single year, they’ll grow much more in a tax-advantaged account than would be possible in a taxable one.

Choose more tax-efficient funds

Take a look at these two similar funds. They are both have a yield of over 2% each year. The difference is that the $VWITX’s dividends are federally tax-exempt dividends! The reason for this has to do with what type of bonds the fund invests in. Vanguards Total Bond fund invests in all types of bonds – ones from companies, from states, from companies outside the US — everything. $VWITX invests solely in municipal bonds – bonds from states in the US. That makes their dividends federally tax exempt.

These are highly stable too – there’s very little chance the state of California is going to suddenly fail (or if it does, there are bigger problems than our bond fund). Looking at the top 5 holdings from this fund we see very familiar names:

Metropolitan Transit Auth (New York Subway)

CENTRAL PLAINS ENERGY PROJ NEB

UNIVERSITY CALIF

Kentucky Inc Ky Pub Engy Aut Bds

MARYLAND ST

Investing in transportation, education, and energy in the states? That sounds like a solid investment. The fund itself holds 7,635 bonds as of today, so you’re insulated against individual bonds failing.

We ran out of tax-advantaged space in our 401k/Roth IRAs before we could reach the number of bonds we wanted to hold. I started looking around for what bond fund to hold in my taxable account and $VWITX/$VWIUX (which is the admiral version of the same fund) stood out the best option.

We now hold more than $100k of this fund in our taxable account. It’s the core bond fund we use whenever taxes would become a problem. Looking at my 1099 tax form from Vanguard from last year, there’s a page that lists out all dividends received during the past year. On that form, there’s a column for “Exempt-interest dividends”. That’s the column where all dividends from $VWIUX are listed. Even though I didn’t hold the fund for a year before getting these dividends, they were still exempt!

If you’re looking for a bond fund that’ll lower dividends in a taxable account, take a look at $VWITX/$VWIUX.

Dividends Aren’t All Bad

I’ve painted dividends in a bad light in this post, but there are cases to be made for them – if you’re in a low tax bracket. Even with a low tax bracket, it’ll be hard to know what percent of your dividends are short-term vs long-term. Vanguard has a handy list that describes how much of each fund’s dividends were qualified vs unqualified which can help understand which funds are best to hold in a taxable vs tax-advantaged account.

If you’re in a tax bracket where you’ll pay taxes on dividends I’d strongly encourage you to think twice about them. Do you really want to pay taxes on them now? Wouldn’t you rather have a fund that appreciates in value instead? Or perhaps a municipal bond fund that allows for tax-exempt interest?

If you’re trying to optimize your taxes, make sure you understand how dividends play into that while you’re working and again when you’re relying on them for income.

For the first time in our lives, we traveled with a guide and a schedule to Vietnam, Laos and Cambodia. The cost of this trip? Around $15,000 for 2 weeks. It was an absolutely amazing trip filled with friends, memories and as much delicious food as we could stomach.

Earlier this year we planned a trip of a lifetime – a 2-week honeymoon in Southeast Asia visiting Vietnam, Laos, and Cambodia. Outside of our house, car, and education, this was the most expensive thing we’ve ever purchased, with a total price tag of around $15,000. Our wedding itself was under $10k, which was in part to save money for this amazing trip.

You might be thinking “Southeast Asia is one of the cheapest places on earth, how the hell can you spend $15,000 in two weeks there?” – well, there’s an easy answer to that: Disney. For this trip, we decided to try something new and do an all-inclusive, guided vacation. You can check out the entirety of the trip on the Adventures by Disney site. They would handle everything from picking us up at the airport to dropping us off 2 weeks later. Aside from getting a Vietnam Visa and having a few passport photos taken ahead of time, we were in their hands for the entire trip.

Attempting to do this trip justice in a single post isn’t going to happen. Instead, I’m going to focus on why it could be worth the money for you (if you happen to have a spare $15k laying around).

The Itinerary: 3 Countries in 12 Days

Flying out to Southeast Asia from the US mainland takes over 24 hours from just about anywhere. If you happen to find a direct flight, hold onto it with your life. This meant that while we were there we wanted to get the most out of our stay before the long flight back. When we were looking at different trips from Adventures by Disney, the ambitiousness of this trip immediately stuck out. Just look at the itinerary:

Yes, you’re reading that right – 5 different hotels, 4 different local flights, and 2 border crossings during those 12 days. If we were planning this trip ourselves, there is no way we’d ever attempt something this ambitious. Not because we can’t, but because our usual pace of travel is far slower.

This trip was a way to test if we could try something more aggressive – in a controlled, organized way. Spoiler: we liked it.

Cost Breakdown

Here’s the full breakdown of where our money went for this trip.

$10,000 – Main Tour for two (breakdown of what’s included next)

$2,500 – Flight from Salt Lake City to Saigon, Vietnam and out from Siem Reap, Cambodia for two

$1,000 – Custom made dress and suit in Vietnam

$400 – Tips for guides

$500 – Food, alcohol, bars anything else we ate

$50 – Souvenirs

After 2 full weeks with our 2 guides, it’s customary to give a generous tip. The recommended amount is $12-$20 a day per guide. That would put the tip for a trip like this somewhere between $288 – $480 since it was officially a 12-day tour.

There are ways to get the Main your cheaper too! If you book it through Costco travel, you might be able to get as much as 10% off. For the main tour, it includes a LOT:

12 night stay in top-notch hotels

4 flights between cities

2 guides throughout, plus additional expert guides on site

2-3 planned excursions every day with admission and transportation

2-3 meals each day – usually hotel breakfast, lunch if we’re traveling, and sometimes dinner (either as a group or individual).

12 days of worry-free transportation using buses, rickshaws, vans, and tuk-tuks.

Everything planned out for us!

Going from our usual “plan everything” to handing that control to someone else took a leap of faith. Luckily it worked out.

The Magic of Border Crossing With a Guide

Having never traveled with a group before, we had absolutely no idea what to expect. When our flight touched down in Vietnam, we were greeted by a man holding signs greeting us before we even got past customs.

Visas for Vietnam are extremely confusing. You need to head to their official site and pay for a visa ahead of time. After a few days, you’re (hopefully) approved then you need to print it out. You’ll bring that printout (and 2 passport photos) with you along the way to show every gate agent along each leg of your flight to Vietnam. We had to show these many times as part of our SLC -> LAX -> Guangzhao China -> Saigon flight.

The man holding the sign quickly collected these papers and our passports and skipped a long line of travelers up to a window to get them processed. Within 5 minutes we had been approved for our visas, somehow bypassing the long line of individual travels without an insider to deal for them.

Going through passport control was even more hilarious. Rather than standing in the long lines for “foreign passports”, he instructed us to get in the empty “diplomat” line. We breezed through there in a matter of seconds and were officially in Vietnam!

That level of service would set the stage for what would be a very pampered trip, unlike any we’d experienced before.

Later on, when we traveled from Vietnam to Laos, and from Laos to Cambodia, we had similar border experiences. Rather than needing to know what to do, we just showed up and were magically funneled through borders without any questions. Some nights we would even hand our passports over to our guides, and they would prepare all of the paperwork for our travels the next day. It felt odd to hand over our passports, but the convenience was a nice bonus.

It was equally impressive how well they timed arriving at flights. We only had to wait to board a plane once – every other time we went through security and immediately boarded.

The Group

We had no idea who to expect on this tour, or how much we’d interact with the other travelers. When we finally settled in and met everyone, it was a group of roughly 28 people total – almost all were couples in their 50s and 60s. We opted for a “adults only” group, which meant no little ones running around. There was one other younger couple in their early 20s who was recently engaged, but aside from that, we were the younguns of the group at 35.

Over the course of 12 days, we’d get to know every single person in the group very well. Sitting together at meals, on buses, hiking and exploring tend to bring people together.

There is one question that rarely came up during that time: “What do you do?”. We didn’t ask, and it wasn’t a thing discussed enough that I remember. The subject likely came up during the first few days of the trip, but the conversation quickly moved on to more substantial topics. The primary subjects to talk about was past travel, favorite places they’ve visited, foods people love and places we were looking forward to during this trip.

Another common theme in this group: everyone was outrageously happy. Like, going to Disney on your birthday happy. As an introvert, there were times I wanted to just curl up and have alone time. For the most part, it seemed everyone here just loved each others company. It was amazing. the closest other experience I’ve had to that with people I didn’t know was at FinCon.

By the last day of the trip, it felt like we’d all known each other for years. It felt like traveling with a group of friends (“travel with friends” happened to make it on my 101 Goals List).

This is a photo from a visit our group made to a school for deaf children in Laos. It was an eye opening experience, and one I plan to write more about.

A Disney Guide & A Local Guide

From the moment we arrived, we had two guides – a Disney guide and Vietnamese guide. Later on, when we visited Laos, we had two additional Laotian guides. When we reached Angkor Wat we had an amazing Cambodian guide too.

Each of these guides was a complete expert in their area. On a bus ride in Cambodia, we played a game of “try to stump the guide”, asking specific questions about the country and its history. He answered everything we threw at him with more detail than we even knew to ask for.

I can’t imagine being responsible for 28 people for 2 weeks, but our guides did it with a smile. Working all day, then going back to their hotel rooms at night to plan and organize things for the next leg must have been completely exhausting. The latest time we woke up during this trip was about 7:30 AM. Most days we were waking up at 6:30 AM to make sure we ate breakfast prior to the days activities.

Top Notch Lodging

Whenever we made it to a new hotel Mrs. Minafi would insist on taking pictures before we messed up each room. Here’s a list of the lodging on this trip, with their respective costs.

Park Hyatt Saigon $250/night *2 = $500

Sunrise Premium Resort Hoi An $120/night * 3 = $360

Sofitel Legend Metropole (Hanoi) $210/night * 2 = $420

Belmond La Résidence Phou Vao (Luang Prabang) $450/night *2 = $900

Sofitel Angkor Phokeethra (Siem Reap) $170/night *3 = $510

Aside from having great service and beautiful rooms, these all had amazing buffets for breakfast. I know, I know, we’re in another country, we should explore – but early morning is the time I love to just wake up and relax. For these, we were able to dig into local food without leaving our hotel.

Sofitel Legend Metropole in Hanoi was at the top of the list here – from service and food. Their breakfast buffet included fresh everything – including a pho station which you could tell was simmering overnight. They also had one of the best restaurants we went to – a traditional Vietnamese place with north Vietnam specialties (and an interesting cocktail menu too!). When it came time to leave that hotel, Mrs. Minafi loudly proclaimed “I don’t want to leave!”.

The Belmond La Résidence Phou Vao in Luang Prabang was the most expensive of the bunch, but the design was absolutely beautiful there. It felt as if we were out in nature as we wandered the halls to our room. Food wise – it was my second favorite as well. It would be hard to justify $450/night when you can grab an entire house Airbnb for closer to $50/night right downtown.

One hilarious part about the hotels in Southeast Asia were the minibars. They would have traditional snacks and drinks you’d find anywhere, but the prices were comical compared to staying in the US. $1.50 for this cold beer I don’t even need to leave my room to find? Yeah, I’ll do that deal. We were too busy to ever order room service, but I imagine it would have been reasonably priced.

The total hotel cost for these two weeks would be around $2,690 for 12 nights at luxury hotels, a good quarter of the total tour cost. For comparison, you could have stayed at hotels in these cities well under $50/night in every place, but I doubt they would have had the service and tasty wakeup calls.

Insane Service

One of the things we got the biggest kick out was “Tinkerbells Service”. Whenever we traveled from city to city by plane, we would be instructed to set our luggage outside of the room early in the morning. “Tinkerbell” would pick up our luggage and transport them to our next hotel room. After our flight, we would get to the next hotel – sometimes with our luggage there before us, sometimes with it arriving while we were still taking photos of the room.

This the level of service you’d expect in a place where they have full control over the surroundings. Going from country to country in Southeast Asia isn’t exactly the easiest place to do this, but somehow they made it work. Having always lugged our own bags when traveling, this wasn’t something we needed, but it was one less thing to worry about when traveling. On the tiny local planes we were flying on, not needing to worry about fitting anything in the overhead bins was a nice bonus.

Food

If there’s one thing we splurge on its food. We’ve spent outrageous amounts on 3-Michelin star restaurants when traveling and also enjoy greasy street food. The food throughout our trip to a-m-a-z-i-n-g. We hunted out unique spots, tried every local delicacy we could and ended up with a number of new favorite foods. Ba la lot and chè in Vietnam, amok and coconut pancakes in Laos and Khmer soup from Cambodia.

There’s a lot here. Mrs. Minafi runs a food blog, and we could happily write about each and every experience. From fresh herbs in Vietnam to Tarantulas in Cambodia – we tried everything we could. If I were to describe the tarantulas, the best adjective would be… hairy.

One of those cocktails was amazing too — it was pho flavored! It even had peppers to control the spice level, just like when having soup.

The unexpected best things I ate were both bought for less than $2 from street vendors: coconut pancakes in Laos and a chive dumpling in Cambodia with a sweet and spicy sauce. Just thinking about both of them makes me want to recreate them here at home.

Excursion Organization and Transportation

Having limited time to experience a city or country has a massive impact on the strategy we’d use to travel. Like many people, the most time we could get off at a time was 2 weeks. If we were traveling for a month, we’d likely get an Airbnb for a month somewhere on the outskirts and slowly explore the city. For 2 weeks though, we wanted to see what we could and leave the trip exhausted. We were optimizing for travel over vacation.

The amount and diversity of activities were impressive.

Vietnam

Mekong River Delta cruise

Cú Chi Tunnels tour

War Remnants Museum

Hoi An

Vietnamese cooking class

Lantern building class

Lantern ceremony

Marble Mountain tour

Hanoi

Rickshaw tour

Tai chi class

Water puppet show

Luang Prabang

Waterfall tour

Rice harvesting and tasting

Butterfly Park

Night market

Temple tours

Buddhist Alms Giving ceremony

School for the deaf visit

Siem Reap

Multi-temple Angkor Wat Tour

Gondola boat tour with wine and snacks

Night market

Cambodian live theater performance

This isn’t everything, but some of the most memorable activities. In addition to having these all scheduled, somehow we were always given VIP treatment for everything.

Take the Water puppet show in Hanoi. It’s a live performance by puppeteers with live music. We showed up a few minutes before the show and had the entire first two rows of the theater reserved for us.

Various memorable photos from the trip.

The Buddhist Alms Giving ceremony was another great example. We show up at 6 am only to find a beautifully laid out area for us to sit and participate – complete with rice and everything. Our Laotian guide was there to greet us and explain the significance and process of the ceremony.

These and so many other activities would have involved hours of planning and additional work to find the activity, make a judgment on if it’s something we could do on our own. Having each excursion planned out let us sit back and spend all of that time just enjoying it. It made it clear to me how much I love letting people who are experts take the lead.

Most Memorable Experiences

I could honestly write an entire post about each memorable place we went or activity we had. Some activities were morbid but eye-opening – like the war remnants museum in Vietnam. Others were challenging (have you ever tried making a lantern using cloth and glue? It’s harder than it looks). Instead, I’ll pull out the top 3 that stand out to me.

One theme that’s interesting to me is that these were all outside of major cities. If there’s one thing we realized on this trip it’s that we enjoyed time in nature quite a bit more than in the hustle and bustle of the cities.

1) Rice Harvesting and Tasting in Luang Prabang

We wouldn’t have guessed that a half day preparing, planting, and harvesting rice would be as exciting as it was. How often do you get an opportunity to till a rice field with a water buffalo? We followed that up by getting our feet dirty and planting (an embarrassingly small) amount of rice. The crazy amount of work needed to get even a cup of rice floored me and increased my respect for farmers.

In Laos, we had the privilege of going out to a rice farm and learning all the phases of how rice is grown, harvested and made into different forms.

Later on, we went to visit a school for deaf children. Through a sign language interpreter, the kids asked what we did while in Laos. We explained how we went to a rice farm to plow fields and learn how rice was made. In unison, all of the children broke out in laughter. We asked why they were laughing? They said that everything here in Laos should be very cheap for us – why pay to come here to do something they could do for free?

2) Angkor Tour

We had one day to explore Angkor. One day. The size of this place is staggering, with temples spanning miles. Just take a look at the entire area. Angkor Wat is the most known (and largest) temple, but it’s just one of the dozens of large temples and hundreds of smaller ones.

As we drove through Angkor on in the back of a 4 person tuk-tuk being pulled by a scooter, we constantly passed small structures on the side of the road that amazed us.

We ended up quickly exploring three temples during our time there: Angkor Wat, Bayon, and Ta Prohm. Ta Prohm has been featured in many movies (most recently Tomb Raider) and is famous for its overgrown trees that appear to be taking back the temple for nature.

I quickly realized that one day wasn’t going to be enough time to do this area justice. I absolutely want to go back and explore Angkor for at least a week.

3) Kuang Si Falls in Luang Prabang, Laos

On the same day as the rice harvesting, we went out to the Kuang Si Falls. This “waterfall” was more of a series at different heights along the river. The largest was impressive, but the series of smaller falls with bright aqua pools were beautiful.

To add to the “insane service” side above, during our visit to the falls, we were dropped off right at the falls with a towel – all ready to jump.

What Wasn’t Great About It?

Nothing is perfect. Despite our guides best efforts, things go wrong. For us, we made every flight, the weather cooperated and no one was hurt or lost.

The less than great parts for us were more about food. Mrs. Minafi and I love the local cuisine, but many of the Adventures by Disney meals cater to more a western palate. We were in Vietnam at a group dinner and one of the options was pizza! I get it, not everyone is an adventurous eater, but offering the best local food should be a staple.

There were a number of great, local meals, but a few not-so-great ones. You can choose to skip breakfast at the hotel or a venture out on your own rather than going to a group dinner. Honestly though, the hotel breakfasts were amazing, usually featuring many local dishes, pho stations and more. Lunch is more difficult to plan around though since we would often eat out between excursions.

The biggest areas for improvement were more related to giving up control of our schedule. That’s not specifically wrong with ABD, but would be an issue for any group travel. Getting up early every day, taking flights when we’d rather stay in town, leaving a site when we’d like to stay and explore more – those are all just parts of traveling with a group. We saw many more things than we would have otherwise due to the fast pace.

Some excursions weren’t great. There were a few things that, while good ideas on paper, took time away that we could have been exploring other areas. The downside is we didn’t know until we had already done them. For instance, there was one excursion to a high rise in Saigon to see the city from high up while eating dinner. The food turned out to be less than great, and the view was something we didn’t get much out of. Luckily there were few issues like this.

Was it Worth It?

For us, this was absolutely worth it, despite the $15k price tag. This trip was organized at a time we were getting married and moving across the country. To also schedule an ambitious two week trip like this would have stressed us the hell out.

The experience of traveling with guides and a group was something we hadn’t tried before but ended up enjoying.

It’s hard to determine what price would be “too much” for us. I doubt we’d do something like this again for at least a few years though. Traveling in this way is great, but it is cost prohibative to do it every year (unless we would only want to do this as your trip).

When we talked to other travelers in our group, nearly everyone one of them had been on multiple Adventures by Disney trips. Some even had been on over 10 trips with multiple each year!

I’ll be honest, if I had about double our savings, I would consider going on one expensive trip like this each year. Galapagos ($8k/person) and China ($11k/person) both look amazing but are even more expensive than the trip we went on. We’ve casually eyed these as a potential next trip somewhere down the line.

At those prices, all of the sudden the total cost ends up closer to $20k/$25k for a 2 week trip! That’s a bitter pill to swallow. It could be possible to live somewhere in China for a good part of a year for $25k.

Like anything, it comes down to opportunity cost. I’d recommend these trips for people that meet all of these conditions:

You want an adventure – waking up early, visiting as many sites as time allows.

You don’t want to plan it.

You have the money to spare.

You’re actively working and have limited vacation time and want to make the most out of it.

You want to travel with a bunch of strangers (skewing in age to 50+) who will become great friends.

One thing to reiterate – we did the “adults only” version of this trip. In talking with our guides, they mentioned that with the kids’ version of the trip families tend to stick together more and chat less with other groups. It makes sense. If you’re a group of 2 parents + 2 kids, that’s a lot to keep track of – and enough to claim most small vehicles and dinner tables for your group alone. If you want more socialization, go with the adults only flavor.

The “actively working” one is a personal preference for this. If I wasn’t working and had all the time in the world, I would prefer a slower pace of travel that could be accomplished at a similar price. For the $15,000 we paid for this trip, we could’ve rented a place Luang Prabang for over a year! Pair that with meals around $4 and you have a vacation that’s 26 times longer for a similar price. This trip is for when you want to be pampered, not worry about anything and be exposed to a great many things.

The question then becomes: do you want to explore a lot of places or go very deep in one location. I think it’s important to do both at times. We wouldn’t have fallen in love with Laos if we hadn’t been on this trip. I love the idea of exploring many areas and finding which ones we want to go back to later and spend more time in. Our shortlist already includes Laos, Cambodia, and Japan to spend extended stays in and we have many places still to see!

For us, we may try another Adventures By Disney down the line. If we do, it’ll be a location that would be difficult for us to explore on our own. While ABD does many trips around Europe, those locations seem less daunting to try on our own. It’s only when language, the difficulty of travel or potential safety comes into play that we’d opt for a full tour experience over a DIY solution.

What about you? Have you ever tried a guided tour experience? Would you? Why or why not?

I was lucky enough to grow up with computers from a very early age. My dad worked at a company with a Mac-heavy environment in the early 80s — the time before Microsoft was a household name when Apple (still) was the brightest star in the personal computer market (funny how things come back around). It’s hard to explain how critical this early exposure to computers shaped my confidence and understanding of them throughout the years.

I didn’t touch a smartphone until an iPhone 3G when I was 27. Before that, it was heavy tower computers and laptops all the time. This experience shaped my education, my job prospects and creative endeavors.

A Playground

My earliest memories on a computer were using it to draw. I’m guessing this might’ve been a precursor to Photoshop back in the 80s – something with minimal options. I never worried about “messing things up” on the system — it just wasn’t a concern. Instead, I focused on important things like how to change the icon for a folder. Later on learning how to format and reset a system was like learning a superpower. It guaranteed that my playground would be working.

The movement of kids from computers to phones and tablets does have me concerned about the creative side of innovation in a generation of people using devices that were created on a different system. But it also has me optimistic! I’m extremely curious what kind of tools, interfaces, and experiences will be created by the first generation of users on these new interfaces.

Today

Even though I started before a time on the internet, I never had a desire to build desktop software for the systems that were currently in place. It wasn’t until something came that changed things, and I was able to watch grow up and take shape that I felt a passion to be a part of it. That new medium was the web, and I was addicted to it from when I first used it in 6th grade. Over the next decade, the web became more than just data – with social networks being one of the most interesting innovations.

I wonder about what that “next thing” is for younger people currently taking shape? Is it VR? Augmented reality? 3d printing? Communities where the users are the builders (Minecraft)? Interactive surfaces? Although I’m jumping in on these, I can’t wait to see what’ll happen!

Note: I really hope it’s augmented reality. I’d love to be able to put on a pair of glasses and see an annotated version of the world – but also be able to take it off.

My First Computer

We had many computers at home growing up. A Macintosh, an Apple LC II, an IBM 386, a 166 MHZ computer and more. These were computers my parents needed for work that I was able to learn and play on. Having access to both Mac (at my Dads house) and DOS (with my Mom), I had experience with both, but unfortunately never got great at the command line. That early lack of command line experience had a big impact later in life, making my switch back to a Unix based Mac more of a bumpy right later on.

Fast forward to sophomore year of high school and I finally bought my own computer — a 333mHz Compaq Laptop. With divorced parents, having a laptop made a lot of sense at the time. Like most of my friends and fellow students at our Center for Advanced Technologies Magnet, I went the Windows route. It wasn’t too long before scraping together parts to build something bigger.

The high school curriculum at CAT (Center for Advanced Technologies magnet program) was amazing. I can honestly say I learned more programming in high school than I did in college — but that might also be because I switched majors 3 times. In high school alone, we focused on the following languages:

Karol the Robot

Chipmunk Basic

Pascal

Fortran

C++

HTML

It would’ve been nice to be exposed to an object-oriented language, but even this was an amazing education for someone graduating college in the year 2000. This high school exposure to programming and multiple system types was an amazing way to get an introduction to core concepts. It’s funny how simple exercises stick with you when you make breakthroughs too. Making my first tic-tac-toe program, and creating my first binary search tree are some of the most memorable experiences programming during high school.

Senior year in robotics class, back in 2000, we even did a crazy project. There were 2 class times during the day, and they were set up to compete with each other. In one class, they were tasked with creating a vehicle that would be gyro stabilized on a ball and move around avoiding a predator from above.

In the other class (which I was in) we were tasked with creating a blimp which would need to fly around and try to dump flour on the ball vehicle. Did I mention that both of these needed to be autonomous vehicles without user control? It should be noted neither class got a working vehicle, but we did learn a ton about autonomous vehicles, blimps, movement and programming for a 486 motherboard. This was in a time before Raspberry Pis, where you could only flash a motherboard with the code once and it’d be permanent. If you had a bug in your code or needed to make a change, you needed to buy another motherboard and flash it.

Today, kids who are able to build their first Minecraft or Super Mario Maker levels while in elementary school are getting this same feeling of creation at an amazingly young age. It’s an addictive feeling, and with more time to build on it, I can’t wait to see what’ll happen.

Housing

When I finally moved into a house, it was obvious that I’d need an office to really program at. It’s funny to think that just 12 years ago I was still a Windows person, not to mention a desktop. Since then I’ve only had 2 MacBook Pros – which goes to show how long they last.

Moving from this setup to a Mac laptop was the biggest computer change for in my life. Being able to use it anywhere has meant that I’m always getting better at using a computer. That’s a weird thing to think about – but even just using a computer can be something you improve on. The more access you have to a computer, the better you’ll get at it.

For kids growing up without a computer in their house, they have a huge disadvantage to overcome. All those years of access to a computer in my house growing up set me up for success in high school, in college and in my career.

Computers at Home Today

Nowadays, I don’t typically program isolated in a room anymore. Instead, I’ll settle down on a couch, watch some Daily Show and chip away at a side project or a blog change. When I write or work from home, I plug my laptop in, use a second monitor and pour some coffee.

Computers in our Apartment

Even after we moved to Salt Lake City, it was important to create an irresistible staircase for writing. Creating an office immediately was essential if I wanted a dedicated place to get things done. This involved setting up the same desk in a new location. It’s not as natural as the others – I still need to fill it out with a few plants – but the setup is amazing.

Computers at Code School

At Code School, we would all manage and maintain our own computers. This means that I used the same laptop at home on the couch, in my home office, and at work. Making sure that this one computer is running perfectly and is optimized for how I work is important, but also can be a rabbit hole when I target optimization. Later on, we switched to company computers, which gave a much clearer separation of work and personal space.

The Advantage

Whenever I hear talk about privilege, and how that shapes someone over time, this is one of the first things I think about – education. Where would I be without that exposure to computers from a young age? What would have happened without a playground to experiment in? If I wasn’t exposed to programming in high school would I have had the drive to focus on it in college in the same way? I can’t say for sure, but I do know if I’d never been exposed to computers until college, it’s very unlikely I would be a developer today.

Every quarter I analyze my investments, share my net worth and assets with the world. This was a crazy quarter. My investments inched up 2.84%, but my net worth jumped an astounding 71.9%! See what led to this dramatic and unexpected jump.

At the end of every quarter, I share a snapshot of my current finances. This includes what I’m invested in, their values and the change over time. The goal in sharing this information is to show it’s possible to make money investing in super-simple ways without the need to watch the latest news. If you want to look back at past investment reports, you can view them all in one handy place.

My hope is that people realize how easy it is to invest and take control of their own investments. Whether that’s reading a book on the topic, taking my free investing course, or looking at what others are doing and learning from that. When I learned to invest it was a combination of all of these, and I always wished more people shared the nitty-gritty of their own decision making. I hope this helps to highlight what I’m investing in, why, and get feedback from people more experienced than myself about ways to improve.

Before getting started – just a heads up – this post is kind of long. This is the process I go through to look back at my investments and spending and decide what changes to make.

In these investment reports, I typically dive into my numbers with full transparency. This quarter will be slightly different. I’ll still be sharing my numbers, but there’s going to be a little hand waving for parts of it. This isn’t because I want to hide anything, but because I’m now working at a publicly traded company, and they’ve driven the fear into us about talking about some things. For that reason, I’ll be mostly focusing on my big picture:

Account value

Net worth

Asset Allocation

Spending

Savings Rate

Progress towards FI

This post will be long, but it’s a good dive into an entire quarter of tracking and work.

Account Value Over Time

After a rough Q2, stocks rebounded slightly but ended the quarter mostly flat. I’ve managed to invest a little bit, but overall my assets have ended level. During this quarter, my investments increased by 2.84% from $1,202,654.00 to $1,236,856.00. This raises the value slightly above where it was at the end of 2017, but not by much. It’s nice to see things moving back in the upward direction after a down quarter.

Slow and steady rise upwards! But what’s up with the (literal) elephant at $2,068,156.00? Hello, that’s kind of big deal right? Ok, storytime!

Windfall Storytime!

Over 7 years ago I started working at Code School. The company was tiny, having just launched a month before I joined. It was a dream job – working with incredibly smart people on fun and challenging topics while also getting to make a difference to people learning how to code. I still work at the company that would eventually acquire Code School today, and it’s also amazing.

I often say I was at the right place, at the right time and put in as much effort as I could. I put in more nights and weekends than I’d care to admit throughout my early 30s there. It even became a running joke (in a good way) that a problem would come up then Adam would work through the weekend and develop a solution and bring it Monday morning. Those hours didn’t seem like work! I loved solving these problems and it had the added bonus of helping the company.

The result of all this was doing my part to help grow the company while progressing to a leadership role (something like a CTO). When Code School was acquired, I got a very respectable payout that instantly reduced my working years by about a decade. As part of that deal, I also got some stock in the company that acquired us. With no easy way to sell it, I tried to ignore it. Unlike a house, a car or a stock, I couldn’t liquidate it, so I didn’t include it in my net worth.

Fast forward 4 years to 2018. I’m still working at the company that acquired Code School and building amazing things with an amazing team. That company (which you can Google) recently decided to go public. I’ve never worked at a public company before, so it’s been an exciting, unique experience. After years investing in stocks, it’s felt like a look behind the curtain into how the process works.

Last month, on the day before my 36th birthday, they went public! Overnight my paper value went up an eye-boggling amount. All the sudden my net worth jumped by two-thirds overnight! I’m still reeling from the experience a month later. It’s rare in this world that something works out as well as this has for me.

So why is this considered net worth and not part of my investments? Well, that’s something I’m going to be vague on. I own the investment and that’s all I’ll say there. The rest of the investments are considered passive investments I can sell at any time as part of the 4% rule.

No. Sadly that’s not how this works. Net worth is not what’s used in the 4% rule, only liquid assets you can convert and sell anytime. I’ll also surely be paying a ton of taxes on these someday, which will be considered proceeds from the sale of a business – not capital gains – so there’s no shortcut to eliminate them.

My Path to Wealth

This all is still completely stunning and new to me. Seeing my net worth almost double in a month after saving and investing for over a decade makes me as an extreme outlier in the jackpot/lottery realm. I’m extremely fortunate to have had this opportunity – one that very few people get. I’ve also followed a well-beaten path to FI – make a lot of money and don’t have kids. I know many who have worked as hard or harder than I have who haven’t received this kind of payout. Again, I credit this towards being at the right place at the right time and working as hard as I could.

In a way, I feel like my story here on Minafi just jumped off the rails and changed from “follow my lead with passive index fund investing to FI!” to “I’m just really lucky”. Unfortunately, I can’t give great specific advice on how to reproduce my largest windfalls. “Bank the money when your parents die and work at a company that is acquired and then goes then public” isn’t exactly reproducible advice. If I were to focus on those sides of my story, it’d probably sound a lot like this:

The business gain side of my story is most interesting here on Minafi as it relates to goals and mindset – so that’s what I talk about instead. If I knew reproducible steps for creating a massive company I’d be blogging about that. Instead, the part I’m most passionate about is developing great habits, investing in yourself, having a growth mindset, becoming useful in your job and solving problems that help others. For me, if every day at a job I’m thinking “if I work this weekend then maybe my stock will be worth more” that wouldn’t have motivated me to do it. Instead, if the reason I work more is tied back to habits and a personal mission it doesn’t seem like work.

When I look back at what makes up the $2,068,156.00 number, it comes down to some hard work and way too much luck.

That’s around $1,250,000 right there from 4 windfalls each over the course of my life. I’m listing that here not to brag, but to be completely transparent about what’s led to this huge a number by this early an age (36 for me).

The other $600k is a combination of saving money over the last decade combined with investment gains. Those gains were able to start with the money I’d inherited and gain momentum with additional savings. If I were to ballpark it, if I hadn’t been lucky enough to join Code School when I did (and nothing else in my life changed) then I’d likely have around $750k saved up (I’m assuming a slightly higher salary if I wasn’t working at a startup). In addition to building kickass stuff, it ended up netting me close to $1.25 million total (!).

Cut out the inheritance as well and my total investments today could be as low as $0. I needed a kick to get started on my investment journey. Without a catalyst, the most worn path through life involves working, saving 10% of your income and retiring at 65. Everyone who bucks that trend has their own catalyst for it – something that started their journey. What’s yours?

I focused heavily on #1 and accidentally hit on #3 in my career. Maybe Minafi will become #4 someday. Others achieve amazing things by going the real estate route. I’d say it’s actually much less work and safer than building a business, with a higher likelihood of a payout if you know what you’re doing. Working at a startup or to help grow a business will either pay off or it won’t. If you’re an employee (rather than an owner) if it doesn’t pay off you still get paid.

For example, right now I’m trying to turn Minafi into a business. Not of the million dollar kind, but of the “pay part of my rent and give me a little more buffer” kind. Right now Minafi is just an expensive (negative cash flow) hobby. I’m fortunate enough to be able to work on it while also doing #1 from my awesome day job.

OK, back to your regularly scheduled investment report.

Investments

One of the ways I learned how to invest was to read the Bogleheads forum. People share what they’re invested in and get feedback from others with more experience. This helped me to understand fees, diversification and more just by reading other peoples portfolios and the comments left by more educated members.

This is one of the reasons why I share my numbers here as well. I share these numbers here for the same reason – to help others learn by example and to get feedback from anyone who has advice that thinks I’d benefit from.

With that in mind, here’s a look at what I’m invested in today:

Account

Holding

Value Q1

Value Q2

Percent

401k

Spartan Bond Index

$87,963.13

$92,354.81

7.29%

Roth IRA

Vanguard REIT

$43,258.66

$48,232.05

3.01%

Roth IRA

Vanguard Total Bond Market

$36,274.11

$67,341.04

2.56%

Brokerage

Vanguard Small-Cap Index

$73,019.98

$63,298.67

6.05%

Brokerage

Vanguard Total Intl Stock Index

$259,438.49

$249,442.63

21.50%

Brokerage

Vanguard Total Stock Market

$488,952.82

$531,347.05

40.50%

Brokerage

Vanguard Intermediate-Term Tax-Exempt Fund Investor Shares

$14,522.29

$100,474.63

1.2%

Brokerage

Wealthfront

$10,037.00

$9,806.00

0.83%

Brokerage

Betterment

$9,984.28

$9,783.00

0.83%

Other

Ethereum

$42,184.23

$37,317.90

3.50%

Other

Bitcoin

$24,950.82

$19,418.13

2.07%

Cash

Cash

$36,195.00

$39,415.92

2.70%

Total

$1,206,509.21

$1,290,086

100%

Like with Q2 2018, there hasn’t been much change here. Most investments have stayed relatively the same. I continued adding money to these over the last quarter, but my savings rate was absolutely abysmal (as you’ll see later).

I did make a few changes since my Q1 report. I decided to sell my AAPL and TSLA stocks. The main catalyst there was the additional speculative part I’m currently holding in company stock. Because of that added specificity, I wanted to move other investments to index funds.

Also a note: this list is needlessly complex. Please do not use this as a template at what to invest in. For example:

Vanguard Small-Cap Index: I only invested in this because I was bored with the Vanguard Total Stock Market and wanted more “control” over what I was invested in. If I were to sell it now I’d need to pay a bunch of taxes. If I had to do it again I’d just invest in Vanguard Total Stock Market and call it day.

Wealthfront and Betterment: These are only opened as an experiment to write about them. I’m planning to sell everything and close the accounts in December.

Multiple Bond Funds: I’m in 3 different bond funds, but really only need to be in 1. The problem is that these are in different accounts – my 401k, my Roth IRA and a brokerage account. That means I need at least 3 different ones right there (the brokerage one could technically be the same, but I prefer the lower dividends version in my brokerage account for tax purposes).

If you’re wondering why I’m in bonds in my tax-advantaged accounts, it all comes down to paying dividends. Bonds are some of the least tax-efficient holdings, up there with REITs. Because of that, I need to pay taxes on the dividends from bonds each year. If these are held in a tax-advantaged account, there’s no need to worry! If these are in a taxable account though, that means that I’ll be hit by a tax bill later.

“But, if you had more stocks in your tax-advantaged accounts they’d grow tax-free!” One reason this isn’t exciting to me is that my future strategy won’t involve using a Roth IRA Ladder to access my 401k earlier. I’ll have plenty in my brokerage account to cover any spending before 60 (or at least that’s the plan). From a tax standpoint, that’s an incredibly flexible place to be – especially considering that my cost basis on the brokerage account is $700,000 on about a $900,000 value. That means that for every $100,000 of stock I sell, I’ll only pay taxes on $23,000 of it.

That’s just crazy to me. If we end up only needing about $60,000 a year to live, that puts our income at $13k/year (+dividends). According to the 2018 tax rate, that’d put us in the 0% capital gains rate tier (which extends up to just over $77,000). This means that we can actually sell a lot MORE stock every year that we don’t need and then immediately reinvest in those same stocks. This is called tax-gain harvesting, and it used to take advantage of selling fund in years you’re in a low tax bracket.

If my math is right, in other to extract $77,000 in value, we’d need to sell $334,000 in stock. We’ll have other income through dividends and perhaps side projects, but at that rate, we’d cycle through all of our capital gains in a mere 4 years, and the cost basis of our entire brokerage account be $0. After that, we’d have a piggy bank we could withdraw from at any time and never hit a point where we’d pay taxes. Craziness! By 5 years into retirement, our income on paper would likely be entirely from dividends.

Cryptocurrencies

Sigh, what to do with these? They’re now roughly 2.5% of my net worth, and way down from their height at $158,845.27. That’s roughly $100,000 less than their peak. I could sell today and make about a 50% profit — $20k in short-term capital gains, for a total of about $15k after taxes. Or I could keep holding them and see what happens?

I’m leaning towards just holding onto them for now. Here’s why: there is a lot of uncertainty in the markets right now. Every week there’s a new article about how the market is about to collapse, how company stock buybacks are the only thing holding up stock prices, how treasury interest rates are at a turning point or how we’re about to experience massive inflation/deflation.

If any of the above happens, how will that impact cryptocurrency? I. have. no. clue. I have a feeling it will – either bringing it down to nothing or spiking it up higher than we’ve previously seen. A lot of people are drawing money out of the markets today, which means people are looking for somewhere to put it.

I’m only OK doing this because it’s such a small part of my overall portfolio. I still will be sticking to the rule I laid out after the last runup which will guide my hand to sell if the situation warrents it:

When assets are more than 5% off track (as a percentage of my entire portfolio), or 50% off track (as a percentage of that fund’s allocation target), buy or sell funds to bring it in line with my target – even if that sale has tax repercussions.

For now, I’ll just hold and see. If I end up holding these for over a year (which would be November for my “newest” coins) I’ll consider selling even to take advantage of the lower long-term capital gains tax.

Note: The value in this chart is slightly different than 7/1/2018 because this asset allocation was done two weeks into July. I wait a week to do this in order to give room for all credit card transactions to finalize before running numbers for the previous month.

These only take into account my liquid investments – not my net worth – so there’s no company stock on this one.

Most asset areas on this chart are well within the 5% tolerance I use to trigger any manual rebalancing. The one area that is off by 5% is the US Stocks side, which is now about 5.3% off. Selling off 0.3% of my small cap (with long-term capital gains) could bring this back in line. With the

You might notice that my bond allocation is slightly higher than most. Bonds today aren’t exactly paying out amazingly well, but I still see them as a good alternative to US/Intl for diversity purposes. I’ve written about why I still invest in bonds, and it’s still true today. Take the last 10 years for example. When the market dropped, bonds did well. If we are the verge of another market decline (which will happen, it’s just a matter of when and how) having some money in bonds will help ease the ride and help me sleep better at night.

Stocks have had an amazing run lately, bonds have been extremely slow, but steady.

The closer you are to needing to draw down funds from your account, the scarier a stock decline becomes. For instance, if you were to have retired back in 2007, then your first year you would’ve seen your account drop by as much as 30% or more. If instead, you held 50% bonds at that time you would’ve been sitting pretty and be able to buy into a very low market.

Who knows what the next recession/downturn will bring though – I certainly don’t. Maybe stocks and bonds will both go down and we’ll switch to using Dogecoin for all transactions, who knows. What we do know is that historically a diversified portfolio has done better during a downturn than one consisting of all stocks.

Spending & Savings

Here’s a look at all the categories broken down for the year. I use Personal Capital to track every expense, the value of every fund, income and a do a whole lot more. If you’re looking for one tool to do everything, I’d recommend checking it out (it’s free).

Q1

Q2

Monthly Avg

Home

$6,093.24

$6,942.24

$2,172.69

Transportation

$2,185.00

$2,209.00

$732.33

Entertainment

$895.00

$1,789.00

$447.33

Travel & Luxuries

$5,411.00

$5,197.79

$1,768.13

Food

$2,706.00

$3,114.00

$970.00

Education & Career

$231.00

$275.00

$84.33

Personal Care

$1,088.00

$2,134.44

$537.07

Pets

$1,220.00

$654.00

$537.07

Other

$5.00

$2,795.91

$466.82

Total

$17,194.73

$25,112.05

$7,491.05

A few of these expenses are on the large side this quarter.

Home – $6,942.91. Our largest single expense every month is our rent – which comes out to $2,068.01 a month. That includes water, parking, pet rent, cable/internet (we have no other wired options for these), sewer, trash, pest control and storage unit a few feet from our apartment. The base rate is $1,820, so it’s about $240 for all of the above. Add onto that about $50/month in power, $12/mo in renters insurance (which is still hilariously cheap to me after buying homeowners insurance) and this category is mostly those expenses. We’ve picked up all the furniture we want for the place, so any ongoing costs are small things – like a rug we picked up for our patio.

While we could go out and buy a house if we wanted, we really don’t want to. It’s been incredible not needing to worry about anything. After spending countless weekends doing yard work, painting and fixing things around the house, it’s felt like a vacation to live in an apartment. Mrs. Minafi and I have moved to Salt Lake City with the idea that we’ll “try it for 5 years then reevaluate”. With that context in mind, it’s one less reason to buy a house.

Transportation – $2,209.00. After selling my car for $150,000 FI dollars recently, we’re down to 1 car. Mrs. Minafi’s car isn’t paid off. We could do that tomorrow if we wanted, but that’s result in various paperwork we’ve been avoiding. Instead, we’re hoping to sell it and switch to an all-wheel-drive vehicle before the winter season. About $1,000 of this is that auto loan which will be gone later. $235 for gas – mostly because of our road trip to Zion. The rest involved pre-paying insurance.

Entertainment – $1,789. This category includes any entertainment in the house as well as outside of it. Going to movies, bars, Netflix and any alcohol we buy. It comes out to about 50/50 alcohol/entertainment. The alcohol side is an area we could definitely bring down. We like mixing cocktails at home, and that’s still a lot cheaper than going to bars. The entertainment side is on the high side because we bought a number of concert tickets this quarter for events throughout the summer, as well as Salt Lake City Comicon tickets for later this year.

Travel & Luxuries – $5,197. This is a lot. $1,400 was on luxaries, which meant almost $3,800 in travel. That’s on pace for $15k a year! With that, we could almost fully live in another country for a year! Why is this sooo high? Let me break this down into the big purchases:

$2,200 – Zion birthday getaway! This was an amazing trip. We stayed at a beautiful glamping location, hiked the Narrows and Angels Landing, and loved every minute of it (although we were sore after the fact). A frugal person could have camped on public lands, packed sandwiches and explored canyons on their own, but this was an amazing introduction to the area.

$900 – Dinner at a 3 Michelin star restaurant on vacation. This was a massive treat and an amazing experience. In retrospect though, it wasn’t worth $1,000. We could’ve eaten much cheaper at another amazing place. I think there’s something to trying an experience like this, but I don’t need to make it a common thing.

$750 – Scotland trip related – flights, tours, hotels.

$400 – Deposit for our stay in Yellowstone for May 2019.

$300 – San Francisco trip related – hotel, Lyfts.

$200 – Instapot and Air Fryer. These have been really fun to cook with so far.

This brings me to a question – what category do you use for meals while on vacation? Are those considered restaurants/food? Or a travel expense? I’ve been inconsistent with how I count them – sometimes putting them as travel and other times as restaurants. For Q3, I’m planning to split out luxuries and travel to badd more clarity to this group.

Food – $3,114, or $1,038/month. This is broken up into about $1,600 in groceries, $1,300 in restaurants and another $200 in coffee, dessert and snacks. This was up from last quarter quite a bit. The biggest increase here was in our grocery bill somehow growing. It didn’t seem like we spent much more than usual here. We tend to shop at the closest grocery store (Harmons) which could be described as a local Whole Foods. It’d be nice to try mixing things up and splitting time between there and Trader Joes.

Personal Care – $2,134 This is one category that the two of us had split onto our own credit cards and I wasn’t previously tracking all of our expenses. It’s going to start including everything both of us spend around the areas of medical, clothes, fitness, beauty supplies and personal services (haircuts, massages, etc). We hadn’t done a great job combining our finances for these and making it clear to each other how much we were spending. Travel hacking ended up being a great catalyst for getting us both on the same cards and making those expenses visible to one another.

Pets – $654. Weekend Our pup spent a weekend in a doggy daycare and came down with something that required treatment. She’s good now though.

Mrs. Minafi Uncategorized – $2,728. Before switching to a single credit card for both of us to spend off, we had separate cards we used to all personal expenses. We’re attempting to combine these, but have decided to declare tracking-bankruptcy and just write off these as Uncategorized. Most of these would be split between travel, food and personal care, but these happened prior to June, and some could have happened in Q1 (I used the date the credit card payment was made to determine these values, rather than the sum of transactions). We have a plan for this in Q3 now, which should make it clearer where our money is going!

Q1 Spending Retrospective

Spending $25k a quarter puts me on pace to spend $100k a year. This would be MUCH higher than last year ($73k), and would blow most of my FI numbers up. Seeing these numbers this high was a huge wakeup call to me to get better at identifying where we’re spending money and do better. I’d like to get Q3 down before $18,000 ($6k/month or $72k/yr) in order to better understand if this is just a fluke quarter with a bunch of unusual spending, or if this is the new normal.

One major new addition here is Mrs. Minafi’s Uncategorized expenses. We joined all of our cards last month and started tracking all expenses in one place – but there were still some lingering ones that were done before that. This number will include some travel, some groceries, some luxaries, some personal care – lots all the same things that would be elsewhere. It would also include some that were paid for both of us. In my Q3 breakdown, my hope is to eliminate this uncategorized column and attribute there to their actual areas.

A few expenses I’d love to find ways to lower over time. The main three are:

Transportation – Even though we sold one car, this was higher than I’d like it to be. For 2 months out of this quarter, we had 2 cars, 2 insurance plans and paid for an extra parking spot. This should be lower next quarter.

Pets – If we can find some friends to look after our dog when we travel, we can save a bunch here.

Travel – Another quarter with this being way higher than we’d planned. I’m slowly beginning to realize that travel is a lot more expensive when you need to cram it into a weekend or a short trip. When you’re able to do it slowly, there’s less urgency and more flexibility to cut costs. It makes me wonder if our travel expenses will naturally come down if we were to stop working (and add a little travel hacking in for good measure).

There is still one large expense I’m anticipating this year: changing cars. We’re planning on selling our car and switching over to a 4-wheel drive vehicle. We’re in no rush right now, but we’ll want to get it before winter.

Savings Rate Over Time

This isn’t going to be good. I’ve been using savings rate as a lifestyle inflation canary for a while. Last quarter that canary is in some serious trouble. My existing SR graph is thrown so much out of whack by this spending that I needed to readjust my formula. Trailing 12 months SR is a better way of looking at this.

The 3-month, 6-month, and 12-month rates are based on the total amount spent and earned over those periods. Previously, I was averaging the actual rates to normalize things. After my single -177% month, that wasn’t going to work anymore. Luckily switching to this formula looks much cleaner.

I did decide to exclude windfalls in these numbers as well. Things like the sale of a business, selling stocks or investments, dividends and selling my house aren’t listed here. This is entirely based on how much I earned through sustainable methods + the occasional small addition from selling something on eBay.

There’s also no profit from this blog, so that’s not a factor in these numbers (well, not in a positive direction at least).

The 401k contributions are factored into both the numerator and the denominator in this formula. It comes down to “total invested” divided by “total earned”. The “total invested” one is a bit more complex than that though since I don’t always invest every cent in a given month. Instead, I base my savings rate on the total amount I could have invested.

The Road to Financial Independence

We’ve (somehow) spent $45,000 so far this year, which would put us on pace to spend $90,000 in 2018. This is significantly higher we’ll likely spend though. Looking at our yearly budget, the actual amount we’re aiming to spend is just under $75,000. Time will tell if that’s realistic or not.

Seeing these numbers increase so drastically this quarter did put one thing into perspective – I need to start tracking my spending. I recently joined the ranks of You Need a Budget to track everything we spend. Their recent addition of an API is extremely handy for the dev in me who wants more control over this data.

2018 Q1 Takeaways

I have, without a doubt, let some of the exuberance of being part of an IPO coupled let my spending inch upwards recently. That’s one of my biggest takeaways from this quarter – I need to get my spending in check! We did a lot of awesome stuff this quarter – the most expensive of which was a weekend at Zion and a trip to San Francisco where we ate at a 3-Michelin star restaurant. Remove these two trips and our expense for the quarter drop around $4,500. Finding ways to travel cheaper is something that’s top of mind – especially considering how many places there are to see on my goals list.

Investment wise, there isn’t much I’d change. My US Stocks allocation is slightly higher than my risk tolerance, but considering all other tax implications I have this year, I don’t think it’s worth selling to bring it in line.

How did your investments do in the last 3 months of the year? Did you spend more or less than what you wanted?

What would you do if you could plan out every minute of every day? Would you schedule activities, leisure or work? I recently tried an exercise which helped me understand what's most important for me to focus on. Try it for yourself and see what would make up your perfect week.

I’ve recently joined the ranks of ChooseFI Podcast listeners, and have loved it so far. In episode 23 with ESI Money, they touch on a topic I’ve started to think more about lately — what would a day look without a job? (don’t worry coworkers, it was mostly because I’ve been sick recently and have had a lot of time). It’s easy to think this would just fall into place naturally – which is a possibility for sure – but I like to be more intentional with my planning. I tend to think without structure, my days would involve floating around from one thought to the next, desperately trying to grasp for important things to do that matched what I was in the mood for.

After staying home from work sick recently, I started to realize that just wouldn’t do it for me. I need more structure and goals in my days. Otherwise, I tend to do very little. With a few keystone habits to my day, I think that would be enough to supercharge my productivity and get momentum built up.

The “achiever” in me (my #3 strength from StrengthFinders by the way) needs to get something done. I love that feeling of accomplishment – even if it’s something no one sees but me. Something as mundane as organizing a closet, clearing away some old paperwork or watching a video that I learn something from gives me that hit of effectiveness. The idea of pulling back from that to just relax made me wonder – would I enjoy it long-term?

ESI Money’s Schedule in Retirement

In that ChooseFI episode, ESI Money goes over what a day looks like in his retirement (he also touched on this in his 1500 Days interview). The result was much less “relaxing” than you might guess but makes perfect sense if you’ve met ESI. Rather than relaxing with leisure time without action, his form of relaxation comes more from a slower pace of life with the flexibility to do things that he enjoys. Here’s a look at his schedule after retirement:

As I’m sorting out my retirement schedule, I’m working on what my miracle morning looks like. As of now I still get up at 6 am every day, workout, and get a lot done early in the day. This gives me flexibility in the second half of the day to either press on or to have fun. – ESI Money

The theme of getting things done early in the morning is a common thread through most of the Daily Rituals – How Artists Work book. Starting strong has a cascading impact on the rest of the day that’s difficult to quantify, but is clear.

Even from my own schedule, it’s clear that the days when I worked on something in the morning were ones I was: more productive, ate better and exercised more (even if that exercise wasn’t in the morning).

What stood out to me from ESI’s schedule the most was how much he reeled off specific things at specific times. I didn’t get the impression anything felt like a chore – everything was something he wanted and choose to do over anything else. It also helps to be able to plan this schedule around times when the gym is relatively empty as people leave for work.

Your personal goal may be to completely relax in retirement, but I’d ask you a question: do you want to do that every day? For some, that answer is resounding yes. This is similar to the idea of vacation vs travel. I tend to think that after some time decompressing from a career, I’d develop a similar schedule to ESI that I start to stick to.

Is “Too Much Flexibility” a Problem?

I want some leisure filled days – there’s no doubt there. If I were retired right now, I’d likely start every day early at the bar watching World Cup Games (I was able to catch one at a bar in San Francisco recently which was a lot of fun!). Flexibility to jump on current interests is one of the most attractive parts of having time.

Flexibility gets boring. You heard me! Imagine waking up and beginning your morning thinking “what am I going to do today?” every. single. day. You’re going to get bored with it. It may sound idealistic if you’re crazy busy today, but doing that over and over will be taxing.

We have no kids and now that we don’t have a house we have crazy few responsibilities. Aside from taking our dog outside a few times a day, there’s not much we have to do. It’s a life designed around having time to pursue other things.

During Christmas break each year, we generally take the week off from Christmas to New Years. This year I had 9 days to do whatever I wanted. We’d just moved to Utah, so we didn’t end up traveling during this time, which meant it was a good example of what I’d do given unstructured time.

What did I end up doing in that week? Pretty much exactly the same things that ESI Money listed. There were a few additions like unpacking, exploring Utah and settling in, but for the most part, it was a combination of gym, skiing, writing, and very quickly developing a routine.

Routine can sound like a curse if you don’t enjoy it, or it can sound like a parachute if you long for it.

How Structured Do You Want Your Time?

To me, the big question is when you want to ask the question “what am I going to do with my day?”. You’re going to ask that question of yourself at some point, it’s just a matter of when. Which fits in best with your planning:

Waking up in the morning with no set plan, then plan your day.

Planning your next day the night before.

Planning your week out ahead of time.

Planning your month out ahead.

Developing a schedule and trying to stick to it with one of the above to fill in the gaps.

I currently do a weekly task planning session every Sunday. That “weekly task planning” is itself a repeating task in Todoist set as a high priority every Sunday. During these sessions (which tend to only take about 10 minutes), I try to lay out the most important things I want to work on this week. I look at the high-level goals I’m working towards and pick small steps towards them.

Sometimes that’ll be chipping away at things on my todo list around the house, taking steps towards large projects by breaking them up into small tasks, things I want to research, errands I want to run or even phone calls I need to make to get things done.

This planning session, coupled with a few minutes each night to evaluate how I did that day to reorganize anything left incomplete, is the right amount of structure for me.

But that doesn’t define what I do with my time. It’s goal oriented, but not a structure. I could wake up and focus my day entirely around whatever is on this todo list, but I don’t believe that would get me up in the morning. As interesting as “Call prescription into pharmacy” is, it’s just something that needs to get done (are you sensing a sickness as a trend this week? It hasn’t been fun-times.).

A Goal & Fun Driven Schedule

Instead, I love the idea of having a set schedule that by its design has time set apart to get things done – both fun things and must do things. I think about how this relates to my schedule today. I don’t add todo list items for “go to work”, or “have coffee with my wife”. That’s not the place for it. I’ll still do these things, but they’re not tasks, they’re part of a routine.

Our Time Structure When Traveling

Whenever Mrs. Minafi and I go on a trip we struggle between planning too much and not planning enough. We’ve overplanned before – trying to hit entirely too many sites on a given day. We’ve since pulled back and have developed a structure that works for us:

We plan one thing to do, or an area to explore before lunch.

One thing to do, or area to explore after lunch.

Make dinner reservations, or plan on what part of town we’ll eat.

We’ve found this mix to be our pace for travel. It gives us a reason to leave our hotel and get out into the world at a reasonable time in the morning.

For reference, here’s what a few of these days have looked like on past trips:

Would This Structure Work in Retirement?

If I were to plan my “perfect” week in retirement, what does it look like down to the minute? That’s what I wanted to try doing and see. This isn’t a commitment to a schedule, or even one that I know if I’d enjoy, but it’s trying to figure out how I’d want to fill in my time helps clarify what I find important.

Schedule Breakdown

Write Every day. Having daily rituals is important to me. If I have something I do “most days”, then there will be stretches when I don’t do it. I’ve found with my personality it’s better to just say “I’ll do it every day” and make it core ritual. This is a relatively new realization about myself since I started waking up every day to write as part of my Miracle Morning routine. At the moment I wake up at 6 am every day and write for about an hour, and have found I really love starting my days this way! Writing is also great for mental health. Journaling, in general, is amazing. If you can both work on a business and help your mental health it can be motivating on many levels.

Exercise Every day. Similar to writing, having some form of exercise every day is important. Even if it’s just 10 minutes of squats and burpees in my apartment, getting my heart rate going is important. I’d like to say I’m doing this now, but I’m not. It’s good to know this is an area I can focus on though. Improving this is part of my Q3 goals.

No breakfast? I’m actually not sure what I want to do for breakfast. I know I wouldn’t want to make a big breakfast every day, but I do enjoy the occasional waffles on Wednesday. I tend to think I’d rather make a bunch of breakfast burritos at once, then have them in the morning while writing, or while relaxing with coffee and Mrs. Minafi. This is to be determined!

Wakeup. Having some time to just wake up with coffee and read is amazing. I love having this time as part of my day, even though it’s not first-thing. In this time I might catch up on my Feedly blogs, read the latest on Rockstar Finance or get a morning hit of Reddit/Facebook/Twitter.

Lunch w/Friend. One idea I really like is scheduling a weekly lunch with a friend. Having the flexibility to do this around their schedule would be nice.

Minafi @ Coffeeshop. I love going to coffee shops and programming/working. It’s fun, and I love being inspired by others that are hard at work (or at least it can seem that way in a busy place). This would be time to work on Minafi operations rather than writing. Creating visualizations, programming, core work on the site, marketing – anything non-writing related.

Cooking vs Eating Out. Even with a lot more time, we love eating out. Mrs. Minafi has a restaurant/food blog, and that’s been a fun inspiration for exploring more restaurants. We recently joined the InstantPot family and have started cooking more large meals with leftovers for days. We tend to eat out at most once or twice a week. I like Liz from Frugalwoods approach to always have a frozen pizza in the fridge in case you’re not in the mood to make dinner, and don’t want to commit to an expensive restaurant outing.

Date Night. Whenever Mrs. Minafi and I feel cooped up in the house we have no problem going out and doing something fun. With Movie Pass and two theaters in walking distance, there’s no shortage of cheap solutions either.

Friends Dinner. This is an idea a friend of mine started a while back. You cook up a big meal, invite friends over (they don’t need to bring anything – except maybe a bottle of wine or a beer) and you all eat together followed by playing a few games. I think having a routine to open our house in this way would be a great way to stay in touch – and even if no one shows up in a given week, we’d still have plenty of leftovers for later.

Flexible Time. This is the area I was most unsure of, to be honest. I like leaving nights open for whatever plans happen to be made. Most of this time would be spent with Mrs. Minafi – as would a bunch of the other times throughout the day. Sometimes we’ll Skype with friends from out of town, go out to a bar or eat with friends, go on an evening hike. More often than not this could be relaxation time at home together snuggling up to watch a movie or binge-watch the latest show with browsing Reddit.

Gaming/Fun. I don’t play too many games nowadays. I’ll tend to focus on one storyline driven game for a few weeks until I’ve completed it, then take a break before playing something else new. When I do get into a game I’m happy to let it take up all available time. Some weeks I might play a game every day while others I’ll be between games and play nothing. I like this eb and flow for gaming where I’m completely engaged in something – reading forums, diving into GameFAQs and trying to get the most out of it – combined with time spent away from gaming.

Volunteer Programming. One area I’ve never been great at is volunteering. It wasn’t something I was brought up doing, and now I’m attempting to bring it more into my life to give back. I was thinking about ways I could help, and the one that stands out the most is by volunteering my technical services to places that could use it. I’m still unsure on how this would work, but I’m curious to explore it. Orlando had a great group, Code for Orlando, which was a local group that focused on volunteering talents together to help the community. I’d love to join or start something like that here and see where it goes.

Education. I love learning, and setting aside explicit time for it is important to me. I’d love to get to the point where this is more of a daily ritual than a set time.

Hiking. Getting into the outdoors here in Utah has been one of the most unexpectedly fun things about our move out here. I love the idea of going on a “long” hike every week (~8 miles) as well as another shorter hike (~4 miles). There’s a lot of mountains and trails to explore! Sundays are also a great time for hiking since quite a few people here in Salt Lake are at church.

I’d group Minafi @ coffee, Gaming/Fun, Volunteer programming and Education are all into the same category: flow/deep work time. The idea is the same for all of them too – working on something with enough focus to completely lose myself and forget the passage of time.

This is one of the most attractive things to me, and it shows in my schedule. These flow time activities take up the most prime areas of my afternoons.

Is this What I’ll Actually Do?

No. There’s a nearly zero percent chance I’ll ever have a week that looks exactly like this. What it did do, however, is lay out some example days that by themselves are exciting to me. I could see myself having a Monday that follows this schedule, or a Wednesday that looks like this. It’s more about proportions than about the specifics for a week.

[Minafi] Teach and inspire kids to be financially educated and independent.

[Minafi] Create a website that gets over 100,000 sustained visitors a month with minimal upkeep.

[Minafi] Create and self-publish a product that lots of people enjoy.

There are a lot of things I can focus on with just this schedule! There are so many more I’d love to find ways to focus on as well. That’s a good takeaway for me to figure out how to make them a part of my daily rituals.

For example, there are a bunch of things in the “learn” category – way more than I could ever do if I only set aside 2 or 3 hours a week. I might be able to learn how to play piano or speak Japanese given enough decades of 2-3 hours, but let’s be realistic – I’d need to devote a bunch more time to those to move the needle. That’s something I want to eventually to make part of my schedule, but too much change at once can lead to failure. Best to work in habits one at a time.

Try Creating Your Perfect Week

I learned a lot doing this exercise – both about what I want, what I don’t want and what I still need to improve on. I’d encourage you to give a shot and see what you can learn yourself. Even if you’re a long ways away from retirement, or if you want to wake up and decide what to do each day, it might make for some takeaways that you could use today. I guarantee you’ll learn something by trying this exercise.

As far as mindset going in – it’s ok for it not be perfect. This isn’t a commitment to do this every day. Think of it more of a rough draft or an outline. When you write the final version with your time, you’ll have that much more knowledge to draw from!

What Can You Do From It Now?

What was most interesting about this exercise was how difficult it was to fill the time. Similar to trying to create 101 goals, filling 112 waking hours wasn’t easy either. It’s easy to fall back on the fun activities – “watching TV”, “browsing the web”, “hanging out with friends” – but are those really what I’d want to do as the core of my days (some yes, all no).

When I’m not sick nowadays, there’s some overlap between my schedule and this schedule. I usually start days writing. I go to the gym after work a few times a week. I have 2 hiking days scheduled each week. Occasionally I’ll head to a coffee shop in the evening and work on a project for a few hours.

What’s most interesting to me though are the areas I want to be part of my life later that aren’t a part of it today. Why aren’t they? I can’t lean on the excuse of “there’s not enough time in the day” considering how many hours I spent just yesterday browsing Twitter and Reddit. We focus on what’s most important to us.

It would make sense that rest and recuperation could be more important when I’ve had a stressful day, but I’d prefer not to medicate with social media. Changing that habit is something that would be healthy, productive and bring me closer in line with my “Perfect Schedule”. (I’m not saying I plan to remove them completely, but just be more intentional about that time).

I do have a few personal takeaways from this exercise that I want to try implementing. These will take months to work into any kind of routine, but I think it’s worthwhile to start now!

Figure out how to make daily exercise (even if it’s just 5 minutes a day) part of my routine.

Consider the idea of bi-weekly Friends dinner / gaming night.

After a few months of exercising every day (in addition to writing), try introducing another daily habit: perhaps a daily gratitude journal, or a brief education-focused time.

Try using Duolingo on the train into work each morning.

What Does Your Perfect Look Like?

I’d absolutely love to see what your perfect week looks like! If you want to make a copy of the above doc and share it in a comment, I’d love to see it – as well as hear how this exercise went for you.

This photo is entirely too picture perfect. I have no idea how it happened.

I’ve tried a lot of different approaches to setting goals. I’ve set yearly goals, weekly goals, quarterly goals and even set daily tasks for myself in Todoist. I like having a plan for what I’ll spend my time on. If I wake up and need to figure out what I’ll work on that day that’s a recipe for binge watching shows on Netflix. Even having a loose idea of a next step is incredibly helpful for me.

For Q2 2018, I set a bunch of goals – too many. When I reviewed the quarter, I realized a number of places I could improve for this quarter. With that in mind, here are my goals for Q3 while these takeaways present.

Start-Stop-Continue

One exercise I love for brainstorming is called start-stop-continue. Start-stop-continue is an exercise you can do by yourself or with others to bring to the surface some of the most important action items in each of those three categories. Here’s how this works:

Turn a piece of paper sideways and create three columns with the headers “Start”, “Stop” and “Continue”.

Next, set the context of the exercise. This is the subject you want to improve. We’ve used this exercise as a retrospective at work often, setting contexts like “The project that just shipped” or “Technical Feedback”.

We have even focused this on a specific person, for example, “Feedback on Adam”. This level of feedback is extremely direct but can be amazing. It takes some time to build up trust with a team – as well as a thick skin looking to grow and be uncomfortable. Getting that immediate, direct feedback from those you work closest with can be extremely valuable.

For my exercise today, I’m using the context:

Reaching actionable goals.

This acts as a retrospective on the last quarter’s goals to see what worked and doubles brainstorming exercise. The focus isn’t about reaching my long-term goals, but just the ones that are next in line. The hope is that I’ll have a bunch of ideas to draw from for next steps.

In each of those columns, it’s good to have a time limit for brainstorming — typically 5 minutes. During that time, focus all of your attention on thinking of as many things as possible that begin with the phrase from the column:

“<I/we/name> should <start/stop/continue>…”

With you filling in what comes next. At the end of these 15 minutes, you’ll have a huge list of things that you think are important to start going, stop doing or continue doing.

Whew, ok, time to try the exercise! Here are my notes from start-stop-continue for the “Reaching actionable goals” focus.

Note: these have categories associated with them, but they didn’t start that way! On your paper, just list out what you think is important. You can categorize them after the fact if it’ll be helpful.

Start: I should start…

[Health] Tracking what I eat to better understand the impact.

Trying to do shorter, more frequent exercise sessions.

Having more tea at home.

[Focus] Develop a time of day where I can get into deep work/focus state.

Create a single “next step” project that I work on until completion.

Creating a focused list of future posts that I can write whenever I have time.

Finding ways to enjoy the next step I’ve laid out.

Letting Mrs. Minafi know when I’m going to work heads down on something.

[Relationships] Connecting with other bloggers more.

Reaching out to friends to hang out more often.

[Mental Health] Reading before bed rather than being on the computer.

Going to bed before midnight.

A gratitude journal, or something else that focuses my happiness/thankfulness for how lucky I am.

Spend less time on my phone while commuting to and from work.

Again, this list didn’t start as nested bullet points but as a single list. After brainstorming and seeing these listed out, I noticed they naturally grouped into these four areas that I felt it important enough to highlight.

Stop: I should stop…

[Focus] Spreading myself too thin by taking on too many goals at once.

Setting too many things to “today” on my todo list.

Watching TV while trying to get something done.

[Mental Health] Being down on myself for lack of growth.

Worrying about metrics and instead focus on creation.

Letting Facebook/Reddit become my default place I go to relax.

Letting myself feel internally pressured to get things done.

Feeling like I’m behind where I want to be (in this blog, or anywhere in life).

Consuming as much news as I currently do.

[Health] Drinking as much alcohol.

Having diet soda and unhealthy snacks at work.

Having as much sugar in my diet.

Like with start, these didn’t start as a bulleted list. What was interesting to me is that when I did start organizing them into categories, they ended up being the same categories as in start.

This got me thinking – maybe what’ll help with the “Start: Focus” items would be helped by some items in the “Stop: Mental Health”? Time to move onto continue and see if anything else comes up!

Continue: I should continue…

[Health] Schedule 2 hiking times a week, and trying to go at least once.

Going to the gym after work.

Preparing meals with days of leftovers.

Getting around SLC without using a car as much as possible.

[Relationships] Going on date nights and having nights dedicated to fun together with Mrs. Minafi.

Reading others blogs and learning their stories.

Writing weekly custom emails.

[Focus] Waking up early every morning to write.

Writing at least one long post a week & 1 custom email a week.

[Growth] Learning and putting into practice SEO topics.

Listening to audiobooks.

Playing videos games.

Saving as much as I can and investing it.

Setting ambitious goals.

Similar categories here, which one interesting addition – things that are working for growth. It’s interesting that growth wasn’t a category in Start or Stop, but was in continue. I (apparently) see focus,relationships, and health as a path to growth, and that’s what it makes sense for me to cultivate.

Alligators and Kittens

These three areas (start, stop and continue) helped clarify some thoughts I was having — specifically around the stop area. It reminds me of the idea of having alligators and kittens in your household:

Right now you have metaphorical kittens and alligators running all around your house. The kittens represent the good things about your life, and the alligators the bad things. Now good and bad here are not absolutes. Alligators can have good traits and kittens can occasionally cause big problems.

Should you: Get rid of the alligators? Or add more kittens?

I love this analogy. No matter how many “good” habits I bring into my life if I have a few awful ones they can upset everything. The “stop” side of Start-Stop-Continue becomes extremely important to look at if I want to get rid of some alligators!

Goals for Q3

So how does this impact what I’m actually working on? Well, for one they help set the boundaries that keep them healthy. A few items on the above brainstorm even made it directly into my Q3 goals!

Overall these goals for Q3 look very similar to Q2’s goals, and that’s OK. Goals don’t need to be completely novel and new every time you plan them. If you’re still focusing on health, tweak your goals for what’s working best but keep health as a focus.

I’m trying that approach for these, where anything I still want to do has been rephrased in a way that excites me and makes me want to actually work on it. For some (like health) this is more of an iteration and acknowledgment to continue focusing there.

1) Improve my energy level and productivity by focusing on diet and exercise

Since moving to Utah, I’ve been slowly introducing more healthy behaviors to my life. It’s somehow been easier than before the move – maybe because I’m not years into a daily routine. Now’s the time to make these changes.

I’ve found that when I exercise and have a solid routine of challenging myself in that way, productivity and happiness in all other ways increases. For years I started my days with a CrossFit workout – which woke me up and got me excited for the day. I’ve switched to writing in the mornings, but I’d like to try doing a quick morning workout as well during this time to get my blood going.

With that in mind, here’s what I’m hoping to do on this front in the next few months!

Track food I consume every day (well, every day that I’m not traveling)

Throughout the day, and at the end of each night, enter everything into FitBit.

Reduce calories to a point where I’m losing 1lb a week

Switch from drinking diet soda to seltzer or water when at work.

Switch from sugary treats to fruit and nuts when snacking at work.

Drink less alcohol and drink more water

Make large quantities of food to have more leftovers to eat when hungry

Continue my pace of 2x hikes a week and 2x CrossFit sessions a week.

Start a morning routine on other days that includes a quick 10-minute workout.

The big focus here is to keep moving and be more mindful of what I eat. When I eat better I exercise more. When I exercise more I focus more. There’s a direct line between being healthy and being productive – and with me being a productivity nut that’s important.

Weight wise I wouldn’t mind losing about 10lbs. In the past 2 years I’ve put that much on, and it’d be nice to go back to around 150lbs. The lighter I am, the easier every workout suddenly becomes. A few years ago I hit over 30 pull-ups (@ 137 lbs) which to me today is just crazy. While I don’t plan to get that lean, dropping a few pounds would make workouts more fun.

The tracking side is especially powerful. The same way tracking my spending helps reduce spending, tracking my food reduces the urge to eat. What’s interesting to me about tracking is that it doesn’t feel like deprivation the same way a diet does. Instead, it feels like informed control. I wildly prefer that method for change.

2) Create and launch the Minimal Investor Book

I’ve started converting the Minimal Investor Course to a book! I’m excited to complete and share it. It’ll include all content from the course plus a bunch of chapters and graphics to help fill in the gaps.

This book is an opinionated approach to begin investing. It focuses on low-cost, diversified, tax-efficient index fund investing – the same approach I (and most in the FI community) prefer. This book is for people getting started on their journey – those who want to achieve FI/RE but need help with the investing side to get there.

The more people I talk to early in their journey, the more I realize this is a HUGE topic. There are so many investing books and available that it’s easy to choose the wrong path. The investing world is really a sea of “here be dragons” where it’s increasingly unlikely you’re going to find a book that does it in the way I’d consider “right” (Bogleheads Guide to Investing and The Simple Path to Wealth come to mind). Even these have major areas that might conflict with the financial independence path (namely around tax-efficient choices now that could pay off in retirement).

The trouble, as I see it, is that people want to learn how to build wealth and they hear “invest in the stock market” as a path to that. Going down that route, there are a lot of options! How does a new investor know which ones to go for, or even which books/articles will guide them towards what they want?

That’s the focus of the Minimal Investor Book. It’s an opinionated guide for people who want to retire early and don’t want to spend a ton of time learning how to do things that won’t help them on their journey. If you’d like to get notified when the book is released, sign up for my book prerelease list.

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To get there, here’s what I’m hoping to do:

Work on The Minimal Investor Book a little each day.

Focus on putti

Expand on the book

Add more graphics illustrating topics all in the same illustration style

Get formatting right so it looks consistent.

Research how to get an ISBN and (if it makes sense) register for one.

Find a designer and contract them to create a cover

Find a good 3rd party credit card processor/way to sell the book easily.

Or conversely, keep things as is, but let the email flow in those posts do the work.

The more I get into writing this one, the more fun it’s been. The free email Minimal Investor Course has good bones but is very rushed. When I created it, I set up my email provider to send the course to subscribers once a week – then I wrote one post a week to send out for it. Some of these emails were written in the morning they were sent out. Did I mention some are as long as 5,000 words? Waking up at 5 am to write 5k words before work was no joke!

I’m looking forward to turning this into something much more refined – although the topics will be similar to what’s out today. There’s a lot more I want to do here later on, but this is a good start. I’m not attempting to reach out to tons of people to join the affiliate program, work with editors, shop this around to publishing companies, or turn it into an audiobook – but all are subjects that I think could happen with time. I’m thinking of this as v1.0.0 with the full intention that it’ll change and get better over time.

3) Create and launch “An Interactive Guide to Investing”

This is probably the most “fun” one on the list. I occasionally have to stop myself from working on it because I know there are other things I want to do in a specific order that makes the most sense (ex: complete the book to send people to as the next step after this interactive guide).

I’ve been excited to work on this since launching An Interactive Guide to Early Retirement last year. I have a bunch of ideas on how this post will go, and what some of the interactive components will be, but they’re all just ideas on paper at this point.

The idea is simple – if someone is completely new to investing, this is a guide you could send them to in order to get them excited about investing. It’ll cover a lot of the topics in The Minimal Investor Course / Book, but at a higher level with engaging ways of exploring the concept. This guide would be more of an introduction to those topics, while the course/book would help readers gain deep insight.

Create an initial draft of the content for the post

Lay out the flow of what topics I’ll cover.

Layout sketches of what the interactive components will convey.

Create paper prototypes of the interactive components.

Create survey used to poll experts in this field.

Send out a survey to 20+ experts to include their input in the post.

Reach out to others interested in investing to help spread

Give a sneak peak to early readers.

Reach out to 10 podcasts about the post.

Reach out to 50 bloggers about linking to the post. (after launch)

Launch the post

That’s a lot to do this quarter *gulp*. This is the one on the list I wouldn’t be surprised if it gets pushed to Q3. Mostly because I don’t want to rush it, and I don’t know how long the Minimal Investor Book will take (I hear books take a while?). The first Interactive Guide took me about 6 weeks working extremely hard each night on it.

This one should go faster, but I want don’t want to ship it until I’m outright ecstatic about it. You only get one first impression, and I want to make it count! After creating the first guide last year, I also know just how many bugs can come up, and I’d like to have it in a state where it’s not likely to need much additional work.

One area that I haven’t done much on as it relates to Minafi is the idea of “outreach”. I’m really interested to do this as part of this post – more to make connections with other bloggers than for the promotional side. I’d love to reach out to a bunch of people and see if they’re headed to FinCon – giving us a chance to meet up there!

Side note: if you’re headed to FinCon and want to meet up, shoot me an email! adam@minafi.com!

4) Refresh & refine top performing Minafi Content

This is one area that I spread myself way too thin on in Q2. Not because it was impossible, but because it was at odds with the other goals I laid out time-wise. For that reason, I’m keeping this goal extremely small.

Complete an SEO audit, fixing all major errors

Go through an ahrefs automatic audit and fix anything that’s considered an error.

Refresh my top 15 posts

Create a Pinterest image for each of them.

Add additional content related to their focus that could boost SEO.

Make sure there are backlinks from other posts to these posts.

Try out group boards on Pinterest

Learn and apply to 5 group boards

Learn the basics of Tailwind (or Coschedule) for cycling posts.

These shouldn’t take too much time, but they will take time away from other things. The goal for Pinterest isn’t to become an expert in it. I’d like to learn enough that I know what I need to focus on that I can then do in Q4. These are good topics I could do some evening with a glass of wine watching TV and relaxing – while the other items on the list require more attention and focus to complete.

Goals Recap

In an ideal world, my Q3 looks like this:

Do a better job on my diet side and lose a few pounds.

Finish and launch the Minimal Investor Book.

Same for the Interactive Guide to Investing.

Refresh a few posts.

Try out Pinterest group boards.

When it’s presented in that way it’s a lot less stressful huh?

Do you have any plans for the rest of the year? How often do you set or refresh your goals? Are you going to FinCon and want to meet up? Let me know!

In Q2 I set very ambitious goals - explore Utah, be healthy, make money, draw more visitors to Minafi. In retrospect, my wording on these goals didn't align with what excites me most - creating and teaching. Here's how I did on these goals and what I learned from the experience.

With June coming to end, it’s time to look back on what goals I laid out for myself and see how I did! I thrive in setting goals, the bigger the better. I’m still learning to keep things realistic as I found out this past quarter. I didn’t make the kind of progress I was hoping for, but it was still a great learning experience. It had the added bonus of helping me find an interest I apparently love – hiking around Utah!

Bonus this week! I was a guest on the 2 Frugal Dudes Podcast released last week. We talk about investment allocation, index funds and even a little cryptocurrency.

The Process: OKRs and KRs

Here’s what I tried for goal setting during the last three months:

Create a few (3) high-level goals to work towards (Objectives).

Each will have a number of sub-points on how I’ll measure success for them (Key Results).

Have a few “health metrics” – things elsewhere in my life that I don’t want to let slip.

This process is called “objectives and key results”. It’s an approach that lots of businesses are starting to use to align teams around common goals and themes. It gives individual teams autonomy to work on their own while having a clear definition of success. At the team level, these OKRs and KR should be entirely accomplishable by that team. This will often take some wordsmithing to get something that has the right impact.

We’re still getting better at this at my work, but it’s a powerful structure when it works. There are a few good books about this structure that are worth checking out:

I’m a product manager myself, so this level of planning is part of my job role (it’s always nice when personal interests mesh well with the professional side!). After going through this process a few times, I’m starting to get better at it. I still have a lot to learn though, that’s for sure. Scoping things down to what’s actually accomplishable is tough. As is knowing what there will be energy to work on in a given day. The ongoing prioritization to know which thing to work on is still a concern – even though the pool of things to work on is smaller. This is an area I struggled with, as you’ll see in my Q2 goals breakdown.

My 2018 Q2 Goals

I set 3 goals for the last 3 months – some much more aggressive than others. I set these will the full intention that they would be difficult to complete in their entirety, and I’d be more than OK if some of them weren’t accomplished. It’s more about limiting what I focus on during the three months to these areas and not letting other things suddenly rise to the top of my focus.

1) Explore more of Utah through exercise and healthy living.

I’m rating this one as a success! I didn’t accomplish every one of my KRs, but I created some amazing habits that I thoroughly enjoy.

See more natural beauty by going for 12, 2+ mile hikes or trail runs

Schedule time on my calendar that Mrs. Minafi knows I’ll be unavailable.

Create a prioritized list of hikes to try.

Go for a first hike, etc.

Increase energy by limiting alcohol to 2 nights a week.

Grow fitness level by going to the gym at least 2 times a week.

During weekly planning, set dates on my calendar for when I’ll be at the gym

Do “Murph” (CrossFit Workout w/a 2 mile run, 300 squats, 200 pushups and 100 pullups) on Memorial day for the 6th straight year – this time in under 55 minutes.

The fitness side and exploration side was very much green, but the diet side was very much not.

We did a bunch of exploring during these three months! We had no shortage of weekends spent traveling and heading out to the mountains. Some of the most memorable ones were:

Spending my birthday weekend in Zion National Park

Hiking The Narrows (9 miles in water)

Hiking Angels Landing (well, as much of it as we had the courage to do).

Going canyoneering – scaling canyons with ropes and an expert

Sooo many hikes around Salt Lake City including:

Centerville Canyon Trail

Rattlesnake Gulch Trail

Desolation Trail Hike

Terrace Trail

Bobsled Trail

Timpanogos Cave & Trail

More!

The side effect of all this has been an Instagram-pretty lifestyle (if only I actually used Instagram). We even tried glamping over a weekend – staying in an upscale tent which had running water and lights.

Hiking and Exploring Utah

My absolute favorite of all of these was The Narrows. The Narrows is a hike in Zion National Park where the trail is IN the river. You follow the river up from where it starts very wide to extremely narrow areas where it’s less than 10ft wide. We started our hike at 8 am and didn’t make it back home until 6 pm – after hiking over 9 miles in the water.

Mrs. Minafi even made a slick video about our hike!

The amount of energy involved in doing this was something I completely underestimated. Walking through water is equivalent to walking with extra weights on your feet. Imagine a 9-mile hike with 5-10 lb ankle weights on each foot and you’ll get a good idea.

See more natural beauty by going for 12, 2+ mile hikes or trail runs

This was probably my favorite thing and that which excited me the most. I created repeating calendar events on Wednesday after work and Sunday morning which were my default hikes. It helped that I was giving myself double the number of opportunities to succeed in my 12x hike goal. If I had other plans, or it was raining, or I wasn’t feeling well, I could skip one of those days but still know I was on track.

I picked up the AllTrails app and have been favoriting places to go all around Utah. When I go on hikes alone (none dangerous by the way) I’ll make sure to update the location in my calendar so Mrs. Minafi knows where I am. Usually, these places lack cell connection, so if I’m going straight from work this gives her a place to check (so she can hopefully rescue me sooner than 127 hours).

Limit alcohol / eat cleanly

Mrs. Minafi and I like a glass of wine or a homemade cocktail (Last Words are my personal favorite) after work to relax. One week I realized that we’d had something almost every night and started to realize that was a little too much. I’d say we hit 2 nights a week for 1/3 of the the time during this period – partly from being sick at times. This is an area I want to continue to improve on. If I were to change this, I might have rephrased it as “only have alcohol to once a week at home / limit alcohol when out to 1 drink”. I think that would be a good compromise, and good food for thought for Q3 planning (or maybe after world cup planning).

On the “eat cleanly” side, I haven’t done a great job of this at all. I know from times when I was much more lean (maybe 25 pounds lighter) that I can go overboard with eating well – and that’s not what I want. I’ve let that swing a little too much to the “it’s here and I like it, so I’ll eat it” side. I think a better approach to this would have been to track what I eat to better understand it. What get measured gets improved right?

Go to the gym / do Murph on Memorial Day

This one was a little rocky this quarter, but it ended well. The CrossFit gym I go to closed in April amidst a bunch of drama. They announced they were closing but that everyones membership would transfer to their other location a few miles away, but people could cancel. Before the gym ended up closing, the coaches brought some members to another gym to introduce them to it. This was shared on Instagram and started a snowball that ended with all the coaches at the gym getting fired. This would’ve been relatively quiet drama, but the owner shared all of these facts in an email sent out to all members(!). This made for a number of… interesting chats with people while warming up with new trainers we’d never met before.

The bright side of this was I transferred to a new gym, Salt Lake City CrossFit. This has a few big bonuses. For one, it’s a great gym with talented coaches and a lot of energy. The CrossFit Regionals were held at the gym last month, which is a testament to their involvement in the community. The workouts are tougher (not a bad thing) and the classes are bigger (kind of a downer – harder for me to make friends).

The biggest advantage for me about this switch is that the gym is 0.6 miles from the train station. This means I can rely on public transportation completely and still go to the gym. This is one of the reasons that I felt enabled to sell my car.

The downside is that I only have 10 minutes (if the train is on time) to travel 0.6 miles and change clothes. That’s been a struggle, which has resulting in my borrowing coworkers’ skateboards, picking up a Lux Razor Scooter (not that Luxe), looking into electric scooters and even those weird 1-wheel electric things.

I haven’t found a solution for this I love yet. The train is late way too often, sometimes making me late. The scooter has been the best solution so far, but does require me carrying a scooter on a bus, on a train to work, then on a train, and on a bus home – which is rather annoying for something that’s still not great. I’m excited that Bird, the controversial scooter startup that’s become a scourge on sidewalks around the country, has made its way to SLC. Downtown SLC is wide and flat with huge roads and lots of bike lanes. It’s pretty much ideal for scooters.

I’m spending a lot of time talking about just getting to the gym because having the inspiration to go hasn’t been a problem. Being healthy enough, having a way to get there and just having a gym to go to have been the main issues. I think they’re all good now.

One thing that was a lot of fun was doing the Murph CrossFit workout this past Memorial Day at the new gym. My time was 56:56 (unpartitioned), which is about 7 minutes slower than 3 years ago. I love bodyweight exercises, and this is one of the most challenging. It consists of doing the following:

Run 1 mile

100 Pull-ups

200 Push-ups

300 Air Squats

Run 1 mile

You can do this straight through like I did this time (which is called doing it unpartitioned), or you can break up the middle part — for example 20 rounds of 5 pull-ups / 10 pushups / 15 air squats. In the past, I’d always done this partitioned in that format, but I wanted to try something new. For me the pushups are always the hardest part. I can do a ton of pull-ups and air squats all day, but push-ups and general endurance are my weakness. If you want to learn more about Murph and Navy Lieutenant Michael P. Murphy who inspired the workout, it’s worth checking out.

2) Create enough income to enable Minafi to be self-sufficient.

This one was a little ambitious, wasn’t it? Like with building any budget, there are two ways to go here – make more money or spend less money. I don’t love that doing what I want on Minafi will be costly, but I do love doing it. I track and share how much I spend on Minafi each month as well as how much Minafi earns on my Income page which is updated each month. I prefer not to create new posts every month because sharing that information isn’t essential for helping others make their first informed investment – but it is useful for understanding my motivations and potential conflicts.

I set a number of very ambitious goals based around launching a product. Spoiler: I didn’t launch a product.

Release a product that helps people learn how to invest and brings in at least $500/month.

Finish all text edits for the course.

Create additional sections to expand on the email course.

Finish creating quizzes.

Record videos for the course.

Update Minafi to point people towards the course

Launch The Minimal Investor Course.

Spread the word by contacting at least 100 financial media creators about joining the affiliate program for this new product.

Find opportunities to share affiliate links by auditing the 25 most viewed pages on Minafi.

The flowers outside of the Mormon Temple in Salt Lake are insanely beautiful.

Release a product that helps people learn how to invest and brings in at least $500/month.

I learned something important about myself this quarter. Having a financial goal like this adds absolutely nothing to my motivation. I get much more motivated by having a goal that is about what I’ll be creating and how I’ll be creating it. This phrasing of the Objectives/KRs is much better for working at a company where there’ll be actual business based around this and lots of people working on it.

Seeing this one on my list didn’t get me excited to work on it.

My goal with this one has shifted in this last quarter, but I’m very happy with the direction it’s headed. Originally I was going to make a course on Teachable complete with some videos teaching investing, quizzes and more. After recording a few videos I realized just how much work that was going to be. I also didn’t love that I’d be linking out to another platform which I’d be beholden to for all eternity (or that they’d be getting my backlinks).

I also didn’t think this would be the best way to reach the largest audience. I spent some time reflecting on my core goal here on Minafi:

I want to help 1 million people make their first informed investment.

And it became clear this was not the right approach to reach that goal. It might be the most profitable path, but not the one that’s aligned with interests that excite me. So, what does that mean? Well, it means that the Minimal Investor Course is going to change from being a course to being a book. There is a reason people write books. They have massive readership and are a familiar format and can be easily scaled.

I’m not sure where the book idea will go long term, but step one will be writing transforming the course into a book and selling it here from Minafi. Where that goes next who knows – selling on Amazon? Looking for a publisher? Actually using the minimalinvestor.com domain I picked up? Time will tell. I’ll have a few Q3 goals around this one for sure.

Another thing that happened this month was I decided to spend time doing completely different things! I redid the navigation, which will be great to build on, I updated everything to be GDPR compliant created a “guides” layout for long posts with a table of contents and more. These side explorations were a ton of fun. Those are the kinds of things I enjoy spending time on, but they aren’t the most impactful things I could spend my time on.

3) Inspire new people to invest by introducing them to Minafi

This goal was all about increasing traffic to Minafi. Seeing traffic increase is a ton of fun, and completely euphoric. Working drive traffic? Not so much. There is a popular statement about this:

Spend 20% of your time creating, 80% of your time marketing.

I completely and utterly ignore this. If I wanted to spend 80% of my time marketing I’d stop blogging altogether. I do think I could spend 20% of my time on this and that would be beneficial though. I didn’t do a great job of driving more traffic to Minafi, but I did try some things and learn some things. I have a plan for Q3 on the marketing side that I’m actually excited to implement (that I’ve already started).

Minafi’s traffic is from all over today. For June, Minafi had about 5,000 sessions/ 7,500 page views. It’s not an amount that’s going to turn too many heads, but the people that have left comments, I’ve talked to on email, or social channels have been amazing! At the end of the free Minimal Investor Course, I have a form for people to give feedback on what they thought about it. These have been some of the most amazing comments I’ve ever received. If I’m running low on motivation then looking at these can be a great boost.

Here are the incredibly ambitious results I tried to achieve in the last 3 months:

Increase month over month social visits from 1,700 to 3,000. (went down to 740)

Go through the “Perfect Pin” course.

Create images for the 15 most pin-worthy posts

Try using Pinterest with these and other strategies.

Look into systems that recycle some old posts (in a non-spammy, spread out way).

Increase month over month organic search visits from 1,600 to 3,000. (went down to 1,353)

Write down my personal strategy to use on all posts.

Develop a strategy to optimize past posts for SEO. (Tips on a strategy here would be helpful actually)

Audit past posts to optimize pages that could benefit most from SEO.

Increase traffic from Quora from 0 to 250 visits per month. (no action)

Increase traffic from Medium from 10 visits to 100 visits per month. (up to like 20/month)

Pinterest

A few on this list worked well though! Getting the basics down of Pinterest was helpful, even if I’m not mass messaging people and joining group boards just yet. Having some next steps there that are less daunting is nice – namely just learning how to use Pinterest, creating pins and actually using Pinterest. Have you ever tried to become good at something you don’t even use? Yeah, it’s not going to work too well. Pays to start as a learner.

Search Engine Optimization

Learning SEO has been so. much. fun. I didn’t expect that. What did it for me was taking Ahrefs Blogging for Business course. The entire course was free during May, but now it’s a very high price of $799. I don’t know that I’d have ever paid that much given my current situation, but I don’t doubt the value I’ll create due to this course will exceed $799.

It really helped turn the lights on for me when it comes to SEO – content planning, finding new topics to talk about in my nice, easy ways to improve existing content – just super helpful all around. I ended up becoming a paying member because of this course – even though their service is $99/month. They have no affiliate program either – I’m mentioning them because they’re just a really useful tool. I’m thinking of the cost today more as an educational expense. I’m paying to get better at SEO by actually doing SEO related tasks.

Post Frequency

In January I wrote 3x a week. From February to April I went down to 2x. In May/June I went down to 1 long post. I’ve actually loved writing one long post. I can focus on creating really good, deep content – which is what I love doing. The ESPP Guide is a good example. It includes answers to just about any question related to ESPPs I could think of (or find people asking about) and even includes an interactive calculator. That guide was researched and planned over a week, then written and implemented over about 4 days.

Writing very often is great, especially when trying to find your voice and figure out your content strategy. It helps SEO, it gives you more fuel to link to and it helps you become a better writer. It’s not the only route though. I’ve found my favored route is writing long, evergreen guides some weeks and more personal journaling / what’s going on in my life now/later spread out.

Promotion Takeaways

I realized a few things of own in going through this process. Namely that:

I’m spreading myself too thin trying to do all of these things at once. I should focus on one and do it until it’s great.

I enjoyed being able to focus on a specific area and become an expert in it. I want to do one at a time but do it well.

It’s OK to spend time learning the basics of multiple areas at once but set realistic expectations for them.

I think about it like this, in my head when I’m beginning to learn a lot of these. What I was trying to do in Q2 was something like this:

That’s a lot of movement in 3 months! Learning and implementing this much action in that time would take a lot of time and dedication that I wasn’t prepared to do. Kathy Sierra, famous for her “Head First” book series and other great content, has this idea that when you’re teaching people, you should focus on specific things to concentrate on and not having overwhelm people with a bunch of things at once. If you want to learn more about this concept, check her great book: Making Users Awesome. If you’re trying to teach people anything – either building a product that has onboarding, building a guide or information product – this book is solid gold.

At the end of the quarter here’s what my progress on this actually looks like.

Not quite as impressive hunh? Setting too many goals here was a humbling process though, and it did help me understand how I want to do this in the future. If I were to try this again, I’d set a goal of having at most two box moves. That could be one move from “Can’t do” to “Mastered”, moving two skills one spot. For Q3, I’m hoping to move SEO to “Mastered” and Pinterest to “Can do with effort” – which you’ll see on my later Q3 goals post. This is a much more accomplishable goal – especially with everything else going on.

Goal Setting Takeaways

That was a lot to go over, but reflecting on goals helps improve how I set them going forward. I’m currently working on setting my Q3 goals, and without reflecting on how Q2 went, I’d likely just make the same mistakes. So what are my takeaways from Q2?

Exercise and hiking related goals worked well. I should build on those habits.

Diet-related goals seemed like deprivation. I should try to set goals that address that. (Maybe a goal around tracking food I eat?)

The goal of building a product here on Minafi is to teach people investing, not to make money. Write your goals that way.

Also, set production/work goals rather than output goals.

Don’t spread yourself too thin with trying too many things in the same area.

I’ll be honest, I’d never heard the term ESPP or “employee stock purchase plan” up until recently. As soon as the company I work for announced they were starting one, I began consuming everything I possibly could about them. Are they worth it? Why should I use one? What’s in it for me? If you’re […]

I’ll be honest, I’d never heard the term ESPP or “employee stock purchase plan” up until recently. As soon as the company I work for announced they were starting one, I began consuming everything I possibly could about them. Are they worth it? Why should I use one? What’s in it for me?

If you’re completely new to the topic and trying to wrap your head around it, then this guide is for you. I’ve been going through the same road to discovery on this issue and wanted to write up a guide about what I’ve learned while everything is still fresh in my mind.

If anything you want to know about employee stock purchase plans isn’t covered in this guide, feel free to ask in the comments! This is a living document of the most common questions asked. If you’re unsure if you should ask – please ask. If you have a question then chances are many others also have that same one.

What is an ESPP?

An ESPP, or employee stock purchase plan, is a company-run program (like a 401k) that allows employees to buy stock, often at a discount. ESPPs are often offered a benefit/incentive at publicly traded companies, allowing employees to earn more money than they could with their paycheck alone.

If the choice was investing in the company or not, that would be true. But by being an employee and participating in an ESPP, there are potentially some huge benefits! There are two huge ones are:

Discount Price – ESPPs generally offer participants a discount on the price of the stock. The SEC limit for this discount is 15%.

“Look-back” period – Some ESPPs offer a “look back” price with a certain timespan – at most 3 years. Rather than purchasing the stock at today’s price, you will “look back” over this time span and get the lowest price amongst all past purchase and offer dates for your ESPP.

In other words, the “best possible” ESPP would have a 15% discount and a 3-year look back.

How Does an ESPP Work?

Here’s an example. The company defines an “offering period“. This would have a beginning and an ending date. We’ll use Home Depot as an example since they’re a public company with their ESPP details on file with the SEC. We’ll use a few terms here, so I’ll define them ahead of time.

Offering date. The beginning of the offering period. The first date at which you’re able to contribute to an ESPP. (May 1, 2017 in this example).

Offering period. The time range during which money is set aside from your paycheck for the ESPP. (May 1, 2017 – November 1, 2017 in this example).

Purchase Date. The date at which stock is actually purchased. (November 1, 2017 for this one)

Let’s go back in time and assume the offering date was May 1, 2017 and the purchase date was November 1, 2017 (6 months later). This would mean that within the company, they offered the capability to join the ESPP to all eligible employees in the weeks before May 1, 2017.

Chances are that in April, they started sending out a lot of company emails, held training sessions and did their best to help employees understand what an ESPP is and how it would be beneficial.

After May 1, 2017, no one new can join for that offering period. On 5/1/2017, Home Depot’s stock price was $154.95. Keep that number in mind.

Home Depot’s plan isn’t bad. They offer a 15% discount price, with a $25,000 yearly maximum and a 6-month look back. That $25,000 yearly maximum means that in a 6-month period, participants can contribute as much as $12,500 to the ESPP. This is contributed through payroll deductions, and cannot be directly bought with cash.

Let’s say we max it out and put $12,500 into the ESPP. What that means is that for the 6 month period from 5/1/2017 to 11/1/2017, our paychecks will be smaller. If Home Depot issues paychecks out twice a month, that’s 12 paychecks, each roughly $1,041.66 less than usual. This money will be after tax.

So what happens on November 1, 2017? Home Depot has a 6-month look back. That means that they look at the price on 5/1/2017 and the price on 11/1/2017 and you get to purchase at whichever one is lower. The price on 11/1/2017 was $165.38, so you would get to purchase based on the 5/1 price of $154.95.

What about the price between May 1st and November 1st? For the ESPP those dates won’t matter. The price could have risen to $200 or dropped to $100 – it won’t matter. The “look back” price will only take into account the price at the “start date” and any “purchase dates”.

But, it gets better. Instead of purchasing at $154.95, you’re able to purchase with a 15% discount. This means that you’ll effectively pay $131.70 a share! Considering it’s worth $165.38 at the time you purchase it for, that’s quite a deal! That’s a lot of variables, so let’s look at them all in one place.

Offer Date

5/1/2018

Discount Percent

15%

Look Back

6 Months

Offer Date Price

$154.95

Purchase Date Price

$165.38

Look Back Basis

$154.95

Look Back Price

$131.70

Amount Invested

$12,379.80

Shares Purchased

94

Value at Purchase Date

$15,545.72

Immediate Profit

$3,165.92

Est Taxes22% Ordinary Income

$696.50

Profit

$2,469.42

Return on Investment (half year)

19.7%

Even on this period, if you joined the ESPP, you’d have made a 19.7% return on your investment after-taxes. Before taxes, it’s over 25%!

When Should I Sell My ESPP Stock?

The above example is assuming you sell your stock immediately on the date you get it – which is the most common thing people do. It’s your safest bet, and as close to a sure thing as you can get in the investing world.

This is called a “same day sale”, something you would elect to do in the weeks prior to the purchase date (November 1st in this example). Your purchaser would then buy the stock for you and sell it automatically, and you would (most likely) receive the proceeds from the sale in your bank account just like a paycheck.

There is a small chance of this going poorly. The time between when the stock is bought and when it’s sold could be a day, or even two days. If the value of the stock drops by more than your discount price during that time, you will lose money on this deal. It’s highly unlikely, but it’s not impossible.

How Do Taxes Work?

Tax rules for ESPPs are weird. If you do a same-day sale, you’ll pay ordinary income tax on the gains between your discount price and the current stock price at whatever your current tax rate is.

In the above table, the “Estimated Taxes” is based on a 22% tax rate on the $3,165.92 profit.

Depending on how your company handles taxes, they may sell some of the shares to pay these taxes for you. From what I’ve read, most companies will pay the taxes for you out of your shares.

The other option is to hold onto the stock long-term. With that, there is a somewhat odd scenario for taxes that initially confused me. Bear with me here with an example:

On 11/1/2017 you buy $12,500 of stock at $131.70 and decide to hold onto it for a year.

On 11/1/2017, you immediately need to pay taxes on the difference between $131.70 and $165.38. This is the same tax you’d pay if you sold immediately – roughly $696.50. Your employer may sell some of the shares immediately to cover this tax. In this case, let’s say they sold 5 shares and paid all taxes.

One year later on 11/1/2018, you sell your remaining 89 shares (94 minus the 5 for taxes) for $200 a share. You’ll likely pay capital gains tax of 15% on this, with your tax-basis being $165.38 for each share.

You effectively bought the 89 shares for $14,718.82 (89 * $165.38) and sold them for $17,800, for a total profit of $3,081.18. You’d likely pay $462.177 in capital gains taxes and take home $2,619.00.

Even though the price went up almost 25% in the year that followed, your gains only increased by $200 by holding onto the stock long term. In addition, you added a lot of risks – including the risk the stock went down and you lost money. That’s why the most common advice is to do a same-day sale.

What if the Stock Goes Down in Price?

Between the “Offering Date” and the “Purchase Date”, the stock could go up, down or stay level. In the Home Depot example above, it went up a good amount, but what if it had gone down to $100?

Luckily it wouldn’t have been bad news for ESPP holders. When the “Purchase Date” came around (11/1/2017 in our example above), we’d look at the two prices: $154.95 on 5/1/2017 and our (fictional) $100.00 price on 11/1/2017. You would get the lower of those two.

This means that you would get to purchase the stock at 15% off $100, or $85 a share for a total of 147 shares (spending $12,495).

If you were to sell those 147 shares immediately at $100 each, you’d make $14,700, or $2,205 in revenue. After taxes, that’s still roughly $1,719.90, which works out to a 13.7% return on your initial investment of $12,495.

Even if the stock drops, you can make a large return on your investment with an ESPP.

That’s the key of all this to me. Since you’re getting the lower of two numbers and a discount on top of that, the math should work out to make you some money.

How Much Should I Contribute To My ESPP?

That depends. If your ESPP doesn’t offer a discount price the math on an ESPP isn’t quite so black and white. A diversified portfolio generally returns somewhere between 7%-9% a year. That’s the benchmark I measure any ESPP gains against. If you can get more than that from your ESPP in the worst case scenario, I think you should max it out and thank your finance department for having an awesome plan.

You can use the calculator below to see if the returns for your plan would fall above or below that number. If they’re above it, max it out. If they’re below it or require the stock to jump up for the math to work – it’s up to you. You know more about your companies likely to grow than I would. Just remember that the alternative is to invest in the stock market as a whole and potentially make 7-9%.

What Happens if You Leave the Company?

If you leave the company between the “offer date” and the “purchase date”, then you will have contributed money towards the ESPP but the actual purchase will not have happened. Unfortunately, you need to be an employee at the company on the purchase date for the ESPP purchase to go through.

If you leave before then your last paycheck will include all of the contributions you made to your ESPP in one lump sum. Unfortunately, there is no way around this. You can’t contribute to it in other ways from your savings — it must be funded via payroll deductions.

Who at a Company Can Participate in an ESPP?

This will be different for each company. Typically if you own more than 5% of the companies stock you can’t participate. Some companies limit this by time (1 year+ employees only), hours worked (full time vs part time) or position. Similar to health care, 401ks or other benefits, this one is up to each company to determine who is they want to allow to participate.

How is an ESPP Different from an ESOP?

An ESOP plan, or an Employee Stock Ownership Plan, is completely different than an ESPP. ESOPs are often used to transfer ownership of a business from one owner to the employees.

ESPPs are usually for public companies, ESOPs tend to be for privately held companies.

ESPPs have post-tax contributions, ESOPs have pre-tax contributions.

ESPPs allow participants to get their money soon – often within 6 months, ESOPs participants don’t have access to it until they retire or leave the company.

The last one is the big one. ESOPs area based arounf the idea of company participants as owners. This is why ESOPs tend to be for privately held companies.

How Do I Know If My ESPP is Good?

This question takes a little math and an understanding of what else you could do with your money. US Stock markets as a whole return somewhere between 9-11% a year on average. A diversified portfolio with bonds, US Stocks, and International funds tends to return around 7-8% a year. If your returns from your ESPP are above this, then you’re getting an amazing deal.

There’s nothing in the investing world that is a sure thing, but being able to buy the stock at a discount and sell it immediately for a profit is about as close as you can get. If I had to decide between getting a sure thing 8% and investing in the market to get 8%, I’d take the sure thing all day.

If you’re looking to learn how to invest. I have a great free course on it that will teach you everything you need to know to invest for the rest of your life.

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ESPP Returns and Tax Calculator

Below is an interactive ESPP calculator. All underlined values are editable in order to calculate the returns of your employee stock purchase plan. The opinion given at the bottom (with my face next to it) is very general take on the value of your ESPP given the numbers, comparing it to investing in the stock market.

What Companies Offer ESPPs?

I started trying to do research on which companies offer ESPPs, but that led to a long boring night of reading SEC filing.

]]>https://minafi.com/espp/feed511451Minafi 1 Year Birthday! What I Learned In my First Full Year Blogginghttps://minafi.com/minafi-1-year-birthday
https://minafi.com/minafi-1-year-birthday#commentsThu, 21 Jun 2018 13:01:55 +0000https://minafi.com/?p=11471

Minafi.com was launched about a year ago, but like all stories, Minafi's starts in the middle. Here is the background on what led up to the launch of Minafi in the decade beforehand, the year since and what the future could hold.

Can you believe it’s been a year?! Every story starts in the middle. Minafi’s story is no different. Today marks what I’m calling my 1 year anniversary of blogging! In reality, I registered minafi.com on July 17, 2015 – nearly 3 years ago. So why am I celebrating my one year anniversary today on June 21st? For that, we need to take a stroll down memory lane to the years well before Minafi was an idea. I’ve mentioned that my investing story begins back in 2006…

2006

I inherit $100,000 after my mom passed away at age 24. I start investing with a financial advisor. Although I learn a lot, he charged a 1% fee and puts me in American funds with a huge load (purchase fee) and expense ratio. I stay in these funds but start learning how to invest by constantly asking “why?”.

2007

I sell a house, buy a house in Orlando, FL, and move in with my (now) wife. My mortgage payment with insurance is 54% of my paycheck. I put 20% down since I had the cash from my inheritance and selling my moms house. After selling my childhood home I add an additional $200k to my investments.

At the end of this year, my finances look something like this:

$250k in investments

$300k home value (with a $240k mortgage).

= Net worth $310k!

At this time, I honestly thought that within the next few years I’d be a millionaire. In actuality, I made a bunch of mistakes:

2008

I’m 26, and the stock market and home market start going down non-stop. I wrote about my reaction to 2008 which was a trying time. I’m very fortunate in that it was only trying on paper. We didn’t lose our house or our job. We had a 30 year fixed mortgage, so we didn’t have to refinance. The year went by mostly as years do but with craziness in the news every night.

By the end of 2008, my investments had dropped a stomach-turning amount:

$250k -> $150k in investments

$300k -> $140k in home value (with a $230k mortgage)

= Net worth $60k (including the underwater mortgage)

You read that right. My net worth went from $310k -> $60k in a year. That’s an 80% drop in a single year!

In my first year investing, I lost 80% of my value.

Why didn’t you do a short sale and sell? I probably should have. I wasn’t hurting for money. All public programs related to TARP were targeted at people in need (which is great) but it meant that my only outset was a normal short sale and negotiating that with my lender. We’d only owned the home for a year at this time and we were still just unpacking.

2009

After a rough 2008, I started to look into doing things myself. I’d been following the common advice up to this point: “buy a house!”, “invest in stocks!” but something was obviously wrong (even though it turns out it was mostly bad luck).

After learning the basics of investing from my financial advisor, I decided to open a Vanguard account and try it myself. I’m honestly not sure how I landed on Vanguard, but somehow I made the right choice. I start putting new savings into this account, choosing to use a Roth IRA. This allowed me to learn how to invest in an account where I didn’t need to worry about taxes at all.

2010

I start reading The Bogleheads Guide to Investing and am completely amazed by it. I promptly join the Bogleheads Forum and begin reading every post I can where people post their portfolios and others review them. What stands out to me at this time is just how much money I’m spending on expense ratio fees, investment advisory fees, and taxes.

Throughout this year I continue investing new income in Vanguard, which gives me more confidence I’m able to do things myself. After maxing my Roth there, I open a brokerage account to add additional funds to it. I now have an understanding of how to optimize my investments in a tax-efficient, diversified, low-fee way.

2011

I bite the bullet and ditch my financial advisor – moving everything to Vanguard. After January of this year, I manage everything on my own from here on out.

This year mostly consists of reading Bogleheads and constantly looking to optimize my portfolio. In retrospect, I tried to do too much, rather than just select some funds and hold them.

This was the year I turned 30. Doing the FIRE math, I realized I could retire by 40 (!). I start meticulously tracking my expenses and going all-in on this financial independence / early retirement idea. Although we don’t make major lifestyle changes like selling a house, we start reigning in our spending and keeping lifestyle inflation under control.

2014

My oldest comment in a post in /r/financialindependence, the financial independence subreddit, leads back to this year. I start reading some blogs about personal finance but largely stick to Reddit as a community. Since I didn’t have a blog, Reddit was my “home” for discussions, replacing Bogleheads before it.

2015

On July 17, 2015, I’m reading a blog about FI – Root of Good – and get inspired to start my own. Justin retired at 33, I was 33 at the time. I was also trying hard to get rid of as much stuff as possible, being heavily inspired by Cait Flanders journey. Minimalism was a very present topic in my mind. I tried a few variants on the term “minify”, which is a programming concept of reducing the size of JavaScript/CSS files. I find minafi.com it seemed like the perfect domain! I’d been learning about investing for 10 years and I knew this topic would hold my interest.

After registering it, I do absolutely nothing for the rest of the year. This was right around the time startup I work for was acquired, so life got a little crazy. I mostly double down at work and pause any side projects.

2016

After a year with the idea of Minafi in my head, I decide to actually do something. I start by opening up my journal and writing about what Minafi could be.

I initially plan to write about the intersection of minimalism, FIRE, and stoicism. I eventually change stoicism to mindfulness after talking to a number people in my life and getting the dreaded “What is stoicism?” response.

I also plan to start anonymously like most bloggers. At some point I realize there’s nothing I really want to share that I wouldn’t share with everyone and decide not to go the anonymous route.

Unfortunately, “doing something” meant creating an entire WordPress theme from scratch (ugh, I should have just spent that time writing). In past jobs, I’d created themes as a developer, but none were great. The Minafi theme wasn’t great either. I wrote the first post, Write Your ‘Year in Review’ Post Now, on July 31, 2016, followed by 7 more posts in August.

Brainstorm of the pages on Minafi - some of them are yet to be realized. Also the logo, which happened!

The structure of Minafi was super simple. I’ve always loved being able to tell stories in a post with dynamic areas. I found the Aesop Story Engine, a WordPress Plugin, which allowed for some amazing things (check their demo). I can’t find a theme that supports it that I like, so I create my own with Aesop support. I have yet to use half the options in this plugin. As I use a new feature I usually need to implement it in my theme, which is a bit of a downer.

I implement this, it looks awesome and I launch it! What I didn’t realize in 2016 was how to get any kind of traction. I didn’t network or meet any other bloggers. I assumed it would just magically show up in search engines. After about a dozen blog posts written into the void without more than a few page views from my real-life friends on Facebook, I stop blogging.

2017

This is where the story of Minafi really begins! I transfer the domain over to Medium and decide to just start writing. The first article I wrote there was What is Your Personal Mission? Writing was like a dam unleashing! I wrote 3 posts in a single day, and end up publishing daily for a week, then 14 times in July. I honestly don’t know how. I think part of it was writing about anything that was on my mind at the time that fit into the extremely broad categories I’d laid out + a new “goals” category.

I very quickly feel limited by Medium and move back to the WordPress theme I created.

This year had a bunch of amazing moments. Some of the biggest highlights were:

At the last minute (well last month) I decide to attend FinCon in Dallas, TX. It turned out to be the best conference I’d ever been to. I was able to meet so many people I’d met online and made so many friends. I book tickets for 2018 FinCon on the spot when they’re announced.

The sketches for the Interactive Guide were not quite as elaborate as the finished product:

Side note: I love sketching with a very broad tip pen. This limits how specific I can go and keeps me focused on the broad strokes of an idea.

It wasn’t long before I started iterating on this with a more conversational style. I loved this approach to making the article interactive. It makes it so each paragraph can have parts that are specific to the reader – like if you were sitting down and talking with a friend about your expenses.

I’ve always loved books and articles written in conversational style. Ones that just seem like it’s flowing and anticipating what you want to know. It was harder than I thought. From here the structure didn’t end up changing too much. It was a month and a half of intense work to get it right though.

Not knowing any bloggers -> meeting tons of people on blogs and at FinCon.

Owning a home -> not owning a home.

Having a ton of stuff -> having an apartment of stuff.

Living in Orlando -> living in Salt Lake City.

Whew, that’s a lot of change. In my experience, every 4-7 years I have a major life shift. I think of my major change years as:

18: The usual high school graduation to college transition.

24: I graduate college, start my first real job, my mom passes away, I start learning to invest, sell a house, buy a house and move in with my (now) wife.

31: I start optimizing everything in my life. Vanguard, CrossFit, LASIK, piano lessons. I’m not sure if this was my mid-life crisis or just an obsession with growth (or both).

35: Everything that happened this year!

At this rate, I’m really curious what’ll happen when I’m 40.

2018

Minafi continues to be a fun side project and a way for me to continue learning in a number of new areas – marketing, SEO, WordPress and growing a website to name a few. The programmer in me has absolutely loved having a full WordPress theme to edit and manipulate to exactly what I want – even if it means more work at times. I think that break from writing makes me more exciting to write when something is ready, which is great.

I’ve focused the topics I write about down to minimalism, investing and financial independence for the most part. I’ll still touch on other topics, but I’ve learned it’s more effective when I frame those topics in these umbrella areas. For example, Find Your Irresistible Staircase to Early Retirement was initially a goals related post, but I reframed it for FI. This little shift to focusing my blog around a specific topic has meant a more consistent voice and a clearer message.

Why Does the Past Matter?

Depending on where you are in your financial journey, there will be someone who has been it at it longer. It’s important not to compare your middle to someone else’s beginning – or vice versa. I’ve been extremely fortunate to find the investing world in my 20s and stick with it for more than a decade.

If you’re just getting starting today, there’s likely a long way to go. Even for me, I’m still putting in the work to grow an audience here, teach people to invest and try to make smart money choices myself.

What Have I Learned?

So much, and yet I have a ton to still learn! Here are a few things have stood out from this one year.

Do one thing at a time. If you’re looking to grow an audience focus on one channel (Email, Twitter, Facebook, Pinterest) and get great at it before moving onto another one. If you want to test the waters of another one and just post to it, that’s a good learning experience, but focus on getting great at one at a time.

Develop a posting schedule. If your blog looks dead, that’s not good. It needs to look active with people coming back on a familiar cadence. I post here on Minafi every Monday and send out an email every Wednesday (well, except this week it was on Thursday because of this post).

Focus your niche. I’ve written about a lot of different topics – investing, financial independence, minimalism, mindfulness, goals, personal stories. I’ve since started trying to narrow things down and focus on using minimalism and investing to reach FI sooner. I still love the other topics and may incorporate the other topics into articles, but I’m leaning to focusing on these three categories. It’s good to have a narrow niche at first.

Bring yourself into your stories, but keep the reader first. If you’re writing purely informational posts, it could be useful, but it won’t be as memorable as if you can somehow connect with your readers. Always remember that you’re hoping to make a change in the reader. You want them to walk away with growth in some way – something they can implement, use, remember to make them better. If you can show this same advice/subject/focus has helped you or someone else, that’s a memorable connection.

Decide if you want to write a lot or write a lot. You’re going to need to write a lot. Depending on your writing style and your topic, either you’ll need to publish a ton of shorter articles (hopefully still 1k words), or fewer very long articles (3k words+). I’ve seen more traffic when I publish more 1k articles, but I enjoy writing more (and am less stressed) when I write longer articles. Find what works and do it a lot.

Create a posts spreadsheet. This has been immensely helpful for me. I have a spreadsheet of what posts I’m publishing and when, with the status of each. It helps a ton when I sit down and think, “what do I write about?”. I’ve already vetted topics and know exactly what to write about when it’s time.

Create time to write. For me, this has meant getting up at 6 am every day and writing for an hour or two. Having that dedicated time keeps things moving along.

Write and edit in separate sections. Whenever I publish a post with grammatical errors or spelling errors and read it later I wince. If I’m editing the same day as I’m writing this happens much more often. It’s nice to look at articles with a fresh set of eyes.

Break articles up with quotes, headers, images, and more. If your posts are all text, that takes a lot of attention by the reader. Use headers, bold things, use quote pullouts, use images – there’s a LOT you can do to break up a post.

Make bold promises. When I released the Minimal Investor Course as a weekly email I hadn’t’ actually written anything! Each week I knew I needed to write the next article in the series, and that commitment device helped me stay accountable. I’ve since started setting monthly and quarterly goals to help stay accountable.

Always be working on something big. It’s easy to get bogged down in everything above and be overwhelmed from a time standpoint. During all that, it’s useful to have something “big” you’re working on that isn’t tied to a weekly release cycle. This could be a course, a book, a really great post, a redesign – lots of things. For me this was the interactive guide, followed by The Minimal Investor Course. Since then, I haven’t been working on something big – I just got out of the habit. I have a few next steps planned, and want to focus on them fully — but one at a time.

The Future

Looking at the sketches from a year ago, there’s still a bunch I want to do! I’ve recently switched to writing one post a week, which has been amazing for helping have additional time to do some of these things. In retrospect, I’m glad I went all in the first year and posted as much as possible. That gave a great start and a backlog for some of the things to focus on now (see below). I have a feeling after completing some of these ideas, I’ll switch back to posting more often again. If you’re just getting starting and wondering how often to post, I’d recommend as much as you can while staying healthy, sane and consistent.

Here’s a snapshot of what the future could hold (in no particular order):

Release The Minimal Investor eBook.

Create An Interactive Guide to Investing, a getting started guide for people absolutely new to investing (similar to the FI guide, but for investing).

Head to FinCon and meet as many people as possible. (If you’re headed to FinCon, drop me a message!)

Create more interactive posts and start a “Calculators” section here on Minafi.

Better understand SEO and how to optimize my posts with newly learned strategies.

Start getting into this Pinterest thing people speak so highly of.

The one common goal of Minafi that all of these strive towards is simple:

Help 1 million people make their first informed investment.

The above list all drive towards that idea. I’m still trying to learn how to write more engaging, memorable content and reach new audiences that might not otherwise be looking for it. There’s something I love about the web as a medium: you can create unexpected content that stands out – if you put in the time and find a way to drive people to it. That’s my personal mission here!

With that in mind though, what would you want to see more of on Minafi in the next year? Is there a topic I should cover? A format I try expanding into? Maybe a collaboration that would be fun? I’d love to hear what you think.

What if I told you that you could sell your used car for $150,000? We recently sold our second car, going to a one-car household. After doing the math on the sale, our net benefit ended up being close to $150,000!

Cars are expensive. Even if you’re buying used, the ongoing cost of car ownership is enough to make you seriously consider some combination of walking, Lyft and hitchhiking. Since we moved to Salt Lake City last November, one thing we’ve been seriously eying is the idea of getting rid of one of our two cars. Last month we finally pulled the trigger and now we’re a one-car household! The haul from the sale? Over $150,000 financial independence dollars. Let me explain.

What is a Financial Independence Dollar?

An FI dollar is how much you’ll need to save to continue paying this expense for the rest of your life. The idea is that your Total FI number needed will include this expense alongside all other spending (housing, living expenses, travel, etc). This Total FI Number is going to be large – usually well over $1 million.

There is a simple way to calculate it which is used in my Financial Independence Calculator. It comes down to two variables – your yearly spending and your withdrawal rate. Withdrawal rate is the percent of your total savings you want to spend each year.

Without getting too deep in the topic, a 4% withdraw rate is somewhat safe but could require lifestyle tweaks if you’re extremely unlucky. A 3.5% withdrawal rate or lower is considered extremely safe.

Wait, why does a lower withdrawal rate mean less spending money?

This is a question I’ve gotten a lot (and sometimes I’ve even been confused about it when responding to emails). Let’s revisit the formula real quick.

YearlyExpenses x (100/WithdrawalRate) = Total FI Money Needed

If your household spending is $60,000 and you’re using a 4% withdrawal rate, here’s what this would come out to:

$60,000 x (100/4) = $1,500,000 total savings needed

You can double check this number to see how much you would spend every year by doing the math in reverse:

$1,500,000 x 0.04 = $60,000 spending per year

$1.5 million is nothing to sneeze at. That’ll take a while to save up, but at that point, you could call yourself “financially independent” (woo!!!).

If you change this withdrawal rate from 4% down to 3%, you’ll need to save up even more:

$60,000 x (100/3) = $2,000,000 total savings needed

Whew, an extra $500,000?! “But I thought you said I was FI?” The $1.5m number is how much you’ll need if you’re flexible, while $2m is how much you’d need if you want to be nearly certain you would have enough to not need to change your lifestyle at any time going forward.

If, on the other hand, you had $1,500,000 and decided to use a 3% withdrawal rate that would give you less money to spend each year:

$1,500,000 x 0.03 = $45,000 spending per year

For that $1.5m to last, you’d need to spend less than $60,000 a year, but you’d be completely safe (historically speaking) spending at least $45,000 of it. If you’re flexible with your spending and spend in the $45k-$60k range each year (spending less during years with a down market) you’d be in a great position.

How Flexible?

If you saved up $1,500,000 (the 4% WR number in the above scenario), you’d be FI, but there’s a chance that you’d need to make a few lifestyle changes if the market fell. This could mean lowering your spending by as much as 25% (down to a 3% withdrawal rate on your same income) on years with a major market drop.

If lowering your spending from $60,000 to $45,000 is completely unrealistic, that might be a good indicator to save up more. If you have some fat in your budget you could cut in an emergency, this would be the time to do it.

As an example, if you had decided to retire in 2006, you would have immediately been hit by the great recession. In 2008 alone, the S&P went down by 37%! Since then it’s been up every year for 10 straight years (which is kind of nuts if you think about it). By lowering your spending from $60,000 to $45,000, it’s similar to putting an addition to $15,000 back into your savings that year.

$1 invested in 2006 through today would be worth $2.76. The $15,000 you didn’t spend in that first year would be worth $41,400 today in 2018!

By being a little flexible in one down-market year, the effect of that money in a decade would have been almost enough to pay for an entire extra year of spending later. This is why it pays to be flexible.

Ok, back to car ownership.

The True Cost of Car Ownership

What’s really exciting about the above formula is that cutting even a small expense can have a massive change on the end result needed. You’re multiplying yearly spending by 25 which can climb fast. Car ownership has a few expenses. Here’s a look at what my expenses on a completely paid off car looked like over the last year.

Expense

Monthly Amount

Yearly Amount

Total

$290.00

$3,480.00

Insurance

$120.00

$1,440

Registration

$5

$60.00

Gas/Fuel

$40.00

$480.00

Tolls

$40.00

$480.00

MaintenanceOil Changes, tires, washes, other

$25

$300.00

Parking

$60

$720.00

$290 a month or $3,480.00 a year makes car ownership one of the largest line items on our budget. That number would be doubled if we had car payments too!

Up until recently, it was also completely unrealistic for us to get rid of one car. In Orlando, we both drove to our jobs – and in opposite directions. Sharing a car would have meant getting up an hour earlier and braving I-4 traffic. If you’re not familiar with I-4, this graphic is completely accurate.

Any time we spent on I-4 was painful, scary time, where were feared for our lives. OK, it’s not that bad, but it’s still enough to avoid whenever possible.

We can use the same formula as above to determine the true cost of ownership and determine how much we would need to save up to continue having two cars.

$3,480.00 * (100/4) = $87,000

Of if we used 3% rate instead, this would be even higher.

$3,480.00 * (100/3) = $116,000

$116,000 is my personal cost of car ownership at 3%! Even that assumes that my current car is paid off and will last forever. If I decided to get a new (used car) priced at $15,000 every 15 years, that’d add another $33,333 to this ($1,000 * (100/3)) for a total of $149,333 (or $112k @ 4% WR).

If you have two cars, your car spending could be double this – closer to $300,000. If you’re spending $40k every 15 years on two cars instead of the minimum, that quickly grows to over $400k household stash needed for supporting two cars.

In other words, cars are expensive.

Will You Need Two Cars Without Work?

If you’re working and you’re actively using two cars, or can’t imagine getting rid of your car – that’s OK! The only thing that made getting rid of one car possible for us was moving to a place that had acceptable public transportation.

One of Mr. Money Mustaches most common recommendations is to bike. It should be reminded that he also has a Nissan Leaf. It’s OK to have a car. I’ve been trying to hike more, and I can without a doubt say that getting to those places on a bike would be a complete pain in the ass. Needing a car can be part of your FI plan. I’d even encourage it! Having a car will allow us to explore a ton of things on my goals list that would not be possible with public/bike/rideshare services only.

Even if you’re not planning to change locations, if you didn’t have your current job, then would you really need a car? Or one for each person in your household? If, as part of your FI plan, you determine you could get rid of a car then that’s potentially $150,000 less you’ll need to save! For couples, this is especially beneficial area when combining expenses (one of the few that was beneficial for us).

What’s your plan? Are you planning on having fewer cars once you’re not working? Have you already made this change? Would you go back to having another car?